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OOMFIELD 


UNIVERSITY  OF  CALIFORNIA 
AT   LOS  ANGELES 


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LIBRARY 

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THE    HANDBOOK    SERIES 


SELECTED  ARTICLES  ON 


PROBLEMS  OF  LABOR 


COMPILED  AND   EDITED   BY 

DANIEL  BLOOMFIELD 

Author    of    "Labor    Maintenance,"    Partner^    Bloomfield    and    Bloom- 
field,  Boston,   Consultants  in   Employment  Management 
AND  Industrial  Relations. 

WITH  AN  INTRODUCTION  BY 

MEYER  BLOOMFIELD 

Author  of  "Labor  and  Compensation,"  "Youth,  School  an'd  Vocation," 
"Management   and    Men,"    Etc. 


THE  H.  W.  WILSON  COMPANY 

NEW  YORK 

1920 


32320 


Published  March,  1920 


^  EXPLANATORY  NOTE 

o 

The  literature  concerning  the  problems  of  labor  is  volumin- 
ous and  recently  there  has  been  published  in  periodicals,  books 
rO  and  reports,   a  good  deal  of   excellent   material   which   throws 
f\    much  light  on  these  problems.     It  is  the  purpose  of  the  com- 
piler and  editor  of  this  handbook  to  present  the  best  of  this 
recent  material  in  as  concise  a  form  as  it  is  possible  to  adopt 
^   in  a  single  volume. 

a"  The  problems  of  labor  are  many  and  it  would  take  several 
volumes  to  cover  the  subjects  in  full  detail.  This  handbook  is 
a  summary  which  will  prove  useful  as  a  guide  for  all  students 
of  industrial  relations. 

When  used  with  the  handbooks  on  Employment  Manage- 
ment, Alodern  Industrial  Movements  and  the  others  in  the 
series  dealing  with  labor,  the  reader  will  find  he  has  the  nucleus 
of  an  industrial  library  with  the  best  thought  on  the  subject 
made  easily  available. 

Daniel  Bloomfield. 
January  22,  1920. 


^ 


CONTENTS 

PAGE 

Bibliography xi 

Introduction  liv  AIeyek  Bloomkield i 

General 

Post,  Louis  F.    The  Central  Problems Everybodys'  5 

Fundamentals  ol   the   Industrial  Problem 

Garton   P'oundation   Report  7 

Labor's  Bill  of  Rights ^7 

Causes  of  Friction  and  Unrest 

Rowntree,  B.  Seebohm.     Labor's  Industrial  Demands 

Christian  Science  Monitor  35 

What's   Wrong  With   Industry  ? Living  Age  39 

Frey,  John  P.     What  Labor  Really  Wants. ..  .Metropolitan  42 

What  Does  Labor  Want  ? Nation  47 

Cost  of  Living 

Taussig,  Frank  W.     Cost  of  Living  and  Wages Collier's  51 

Ogburn,  W.  F.     Measurement  of  Cost  of  Living  and  Wages 

Annals  of  the  American  Academy  5O 

Price,  Theodore  H.     The  Index  Number  Wage. ..  .Outlook  08 

Methods  of  Compensation 

(a)  Wage  Methods  and  Bonuses 

Stone,  N.  I.     Wages,  Hours,  and  Individual  Output 

Annals  of  the  American  Academy     77 

Fitch,  John  A.  Stretching  the  Pay  Envelope Survey     97 

Wisler,    William.      Wages    and    Some    Industrial    Fallacies 

American  Federationist  102 

Payment  by  Results New  Statesman  loy 

(b)  Profit  Sharing 

Perkins,  George  W.     Profit  Sharing Current  Affairs   tii 

Dennison,  Henry  S.  Why  1  Believe  in  Profit  Sharing 

Factory  120 

Eliot,  Charles  W.  Road  Toward  Industrial  Peace 

New  York  Times  123 


^ 


viii  CONTENTS 

PAGE 

The  Profit  Sharing  Fallacy. .  .International  Steam   Engineer  133 

(c)     Minimum  Wage 
Webb,    Sidney.      Economic    Theory    of    a    Legal    Minimum 

Wage   Journal  of  Political  Economy  135 

Hours  of  Work 

(a)  The  Shorter  Work-Day 

Morrison,    C.    J.     The    Eight-Hour   Day 

Engineering  Magazine  139 

Labor's   Views   on  the   Shorter  Workday 

American  Federationist  143 

Executive  Council  of  the  American  Federation  of  Labor  on 

the  Shorter   Workday American   Federationist  I-16 

Trades  with  the  44-Hour  Week Industrial  Relations  147 

Feiss,  Richard  A.  Maximum  vs.  Minimum  Hour  Legislation 

Annals  of  the  American  Academy  150 

Fitch,  John  A.     Where  Time  Is  Money Surs^ey  153 

Cole,  G.  D.  H.     The  Hours  Movement  in  England 

New  Republic  158 

Leverhulmc,    Lord.     The    Six   Hour   Day 161 

The  Six  Hours  Day Nation  164 

(b)  Night  Work 

The  Baking  Trade Month's  Work  167 

Tenure  ok  Employment 

Ross,  Edward  A.     A  Dismissal  Wage Independent  171 

Meeker,    Royal.     Unemployment  and   Health    Insurance 175 

Program  of  New  York  State  Reconstruction  Commission.. 

Monthly  Labor  Rcviev.-  180 

Trade  Unionism 

Proportion  of  the  Organized Amalgamate ,1  Journal  185 

The  Employer's  Viewpoint. ..  .U.  S.  Industrial  Commission  187 
Laughlin,   J.    Laurence.      Capitalism   and    Social    Discontent 

North  American   Reviev.'  203 

Taft,  William  Howard.  Collective  Bargaining 212 

Hobson,  J.  A.  Ethics  of  Collective  Bargaining.  .Standard  215 
Wolman,    Leo.     Collective    Bargaining   in   the    Glass   Bottle 

Industry    American    Economic    Review  220 

Gary,  Elbert  H.    Present  Industrial  Issues 236 

Barr,  William  H.     The  Open  Shop 243 


CONTENTS  ix 

PACE 

Facts  About  the  Non-Union  Shop 

International    Holders'    Journal  243 

Hoagland,  H.  E.     Closed  Shop  versus  Open  Shop 

American  Economic  Review  245 

Stoddard,  Lothrop.  The  Common  People's  Union 

World's   Work  255 

Union  Label    Amalgamated  Journal  261 

Brandeis,  Louis  D.     The  Incorporation  of  Trades  Unions.  .   262 

Labor  Disputes  and  Ahjustment 

The  Cause  of  Strikes New  Statesman  269 

Beeby,    George.     The   Australian    System    of    Dealing   with 

Labor  Disputes   Survey  272 

Howard,    Earl    D.     The    Development    of    Government    in 

Industry lUinois   Law    Review  278 

Frey,  John  P.     The  Question  of  Trade  Jurisdiction 

Amalgamated  Journal  286 

Groat,  George  G.  Attitude  of  the  Courts  Towards  Industrial 

Problems Annals    of    the    American    Academy  290 

Limitation  of  Output 

Gompers,   Samuel.    Who   Limits   Output  ? 

International    Molders'   Journal  301 

Bell,   George  L.     Production   the  Goal 

Annals  of  the  American  Academy  306 

Industrial  Insurance 

Schereschewsky,  J.  W.     Industrial  Insurance 313 

Lapp,  John  A.     Health  Insurance 316 

Kimball,  H.   W.     Group  Insurance.  .Industrial  Management  324 

Meeker,  Royal.     Social  Insurance  in  the  United  States 331 

Housing 

Ihlder,    John.      Housing    and    Transportation    Problems    in 

Relation  to  Labor  Placemeiit 

Annals  of  the  American  Academy  2;^^ 

Well,  Matthew.    Labor's  Attitude  on  Housing 342 

Methods  of  Promoting  Industrial  Peace 

President's  Industrial  Conference 349 


X  CONTENTS 

PAGE 

Sullivan,    J.    W.     Trade    Union    Solution    of    tne    Clash    of 

Rights    International  Moldcrs'  Journal  359 

Proposals  of   President's   Second  Industrial   Conference....  362 

Rockefeller  John  D.,  Jr.     A  New  Industrial  Creed 

Current  Affairs  368 

Fisher,  Irving.     How  Can  the  Employer  Help  the  Worker 

Satisfy  His  Fundamental  Human  Instincts?. ..  .Survey  376 

New  Labor  Code  of  the   World Survey  37S 

Commons,    John    R.     Bringmg  About    Industrial    Peace 3<-j6 

Occupational  Hygiene 

Newman,   Bernard  J.     Industrial  Losses 

American   i'ccerationist  41.5 

Lee,  F'rederic  S.     Industrial  Physiology,  A  New    Science...    i'o 

Women  in  Industry 

Van  Kleeck,  Mary  A.     The  New  Spirit  in  lndi:st'-> 41'^ 

Standards  Governing  the  Employment  of  Women  m  Industry  4ju 

Index     .    433 


BIBLIOGRAPHY 

General 

Academy  of  Political   Science    (N.  Y.).      Proceeding,^ :   Vol.   7- 

No.  I.  1917.     Labor  disputes  and  public  service  corporations. 
Adams,  T.   S.,  and  Sumner,   Helen  I.     Labor  problems.     Mac- 

millan.  1905. 
Annals  of  the  American  Academy.    Vol.  6g.  IQ17.    Present  labor 

situation. 
Annals  of  the  American  Academy.    81 :  151-62.  Ja.  'ly.     Capital 

and  labor.     C.  M.  Schwab. 
Annals  of  the  American  Academy.    81 :  163-6.  Ja.  '19.    Post  war 

standards  for  industrial  relations.     H.  P.  Kendall. 
Atlantic  Monthly.     123:  483-90.   Ap.   '19.     Immigration   and   the 

labor  supply.    D.  D.  Lescohier. 
Bloomfield,  Meyer.     Management  and  men.     Century.  1919. 
Booth,  C.    Industrial  unrest  and  trade  union  policy.     Macmillan. 

1914. 
Brandeis,   Louis   D.     Business — a  profession.     Small,   Maynard. 

1914. 
Century.     98 :  73-88.  M3'.  '19.     Industrial  politics :  the  next  step 

in  industrial  relations.     G.  Frank. 
Cohen,  Julius   Henry.     An  American  labor  polic}'.     Macmillan. 

1919- 
Commons,  John  R.    Labor  and  administration.    Macmillan.  1914. 
Commons,  John  R.,  and  Andrews,  John  B.     Principles  of  labor 

legislation.     Harpers.   T916. 
Contemporary  Review.     115:  361-8.   Ap.   '19.     Industrial   unrest, 

a  new  policy  required.     A.   Henderson. 
Edinburgh  Review.     229:  232-52.  Ap.  '19.     Problem  of  the  age. 

A.  Shadwell. 
Edinburgh   Review.     229:  326-44.  Ap.  'ig.     Economic  fallacy  in 

industry.     LjTiden  Macassey. 
Everybody's.     40:  60.   F.   '19.      Central    problems.     L.    F.    Post. 

Reprinted   in    this   Handbook.      See  page    5. 
Forum.     61 :  178-88.  F.  '19.     Four  partners  in  industry.     J.   D. 

Rockefeller. 


xii  BIBLIOGRAPHY 

Forum.  6l :  600-10.  My.  '19.  Our  labor  problems.  VV.  B. 
Wilson. 

Kelley,  Florence.  Modern  industry— in  relation  to  the  family, 
health,  education  and  morality.     Longmans.   1914. 

Living  Age.     281 :  37-42.     Industrial  unrest.     W.  H.  S.  Aubrey. 

Living  Age.  299:  588-600.  D.  7,  '18.  What's  wrong  with  in- 
dustry? 

Reprinted    in    this    Handbook.      See    page    3y. 

Living  Age.  300:  705-10.  Mr.  2.2,  '19.  Causes  and  remedies  of 
labor  unrest.    D.  Llojd  George. 

Nineteenth  Centurj'.  85:  876-88.  My.  '19.  Is  civilization  com- 
mitting suicide?     F.  Gribble. 

Nineteenth  Century.  85:  1146-64.  Jc.  '19.  Labour  unrest:  its 
causes  and  its  permanent  cure.     J.  E.  Barker. 

North  American  Review.    203 :  403-12.  Mr.  '16.    Capitalism  and 
social  discontent.    J.  Lawrence  Laughlin. 
Reprinted   in    this    Handbook.      Sec   page    203. 

Outlook.  120:  617-19.  D.  18,  '18.  Industrial  injustice;  five  pro- 
posed remedies. 

Simkhovitch,  M.  M.  The  city  worker's  world  in  America. 
Macmillan.   1917. 

Spectator.     117:  281-2.  S.  9,  '16.     Labour  and  democracy. 

Spectator.  119:  377-8.  O.  13,  '17.  The  problem  of  industrial 
unrest. 

Spectator.  121 :  329-30.  S.  28,  '18.  Foundation  of  industrial 
peace.    T.  E.  Jackson. 

.Survey.  33:  284-8.  D.  12,  '14.  Summing  up  our  industrial  re- 
lations: the  preliminary  report  [of  the  U.  S.  Commission  on 
industrial  relations]. 

LTnited  States.  Commission  on  Industrial  Relations.  Senate 
Document.  No.  415.     Washinp;ton,  1916. 

Webb,  S.  B.     Problems  of  modern  industry.     Longmans.  1913. 

Cost  of  Living 

.\cademy  of  Political  Science  (N.  Y.)  Proceedings.  8:  235-42. 
F.  '19.  Standard  of  living  as  a  basis  for  wage  adjustments. 
W.  F.  Ogburn. 

Annals  of  the  American  Academy.  81 :  110-22.  Ja.  '19.  Mea- 
surement of  the  cost  of  living  and  wages.    W.  F.  Ogburn. 

Reprinted   in   this   Handbook.      See   page   56. 
Forum.     52:   49-59.  .11.  '14.     Sociological  view  of  the  high  cost 

of  living.     H.  P.  Fairchild. 
Literary  Digest.     61:  110.  Je.  28,  '19.     Rising  living  costs  and 

rising  incomes  during  four  war  years. 


BIBLIOGRAPHY  xiii 

New  Republic.  20:  192-3.  S.  17,  '19.  Production  and  cost  of 
living. 

New  Republic.  20:  221-3.  S.  24,  '19.  To  stabilize  the  living 
wage. 

New  Statesman.  12:  66-7.  O.  26,  '18.  Wages  and  the  cost  of 
living. 

Outlook.  121:  742-3.  Ap.  30,  '19.  Index  number  wage;  a  scientific- 
method    for   adjusting  wages  to   the  cost   of  living.     T.    H. 

Price. 

Reprinted  in  this  Handbook.      See  page   68. 
Outlook.    122:  335.  Te.  25,  '19.    High  cost  of  living.    T.  H.  Price. 
Public.    22:  246.  Ap.  26,  '19.     Shrinking  dollar. 
Scientific   American,      no:  247-8.    Mr.   21,   '14.      Rise    in    prices 

and  the  increased  cost  of  living.     John  B.  C.  Kershaw. 
Survey.     41 :  737-8.  F.  22,  '19.     Adjusting  wages  to  the  cost  of 

living. 
Streightoff,    F.    H.      Standard    of    living   among   the    industrial 

people  of  America.    Houghton  Mifflin.  1915. 
World's  Work.    38:  576-7.  O.  '19.    Work  and  thrift  as  cure  for 

high  prices. 

Methods  of  Compens.\tion 

American    Economic    Review.      9:  701-38.    D.    '19.      American 

minimum  wage  laws  at  work.     Dorothy  W.  Douglas. 
.Annals  of  the  American  Academy.     81:  123-9.  .Ta.  'i9-     Wages 

for  women  workers.    M.  Anderson. 
.Annals  of  the  American  Academy.     85:  120-45.  S.  '19.     Wages, 

hours  and  individual  output.     N.  I.  Stone. 

Reprinted   in   this   Handbook.      See   page    77. 
Atlantic  Monthly.     124:  408-19    S.  '19.     How  the  tariff  affects 

wages.     F.  W.  Taussig. 

Contemporary  Review.  106:  203-8.  Ag.  '14.  Right  to  a  living 
wage.     T.  V.  Bartlett. 

Edinburgh  Review.  220:  t-t8.  Ta.  '19.  Profit  sharing  in  agri- 
culture. 

Everybod>^s.  30:  462-74.  Ap.  '14.  Henr\'  Ford's  experiment 
in  good  will.     G.  Garrett. 

Independent.  97:  365-6.  Mr.  15,  '19.  Legal  dismissal  wage. 
E.  A.  Ross. 

Reprinted   in   this    Handbook.      .'^oc   nace    171. 

Industrial  Management.    57:  296-8.  Ap.  '19.    Profit  sharing  plan 

for  executives.     A.  P.  Ball. 
Industrial   Management.      57:  437-8.    Te.    '19.      Profit    sharing— 

acceptahility  and  possibilities.    G.  E.  Holmes. 


xiv  JJlBLlUGKAPliY 

Industrial  Alanagemcnt.     58:  42-5.  Jl.  '19.     Fallacy  of  the  em- 
ployee's profit  sharing  as  a  reward  for  labor.     P.  L.  Burk- 

hard. 
Journal  of  Home  Economics.     11:  270-2.   Je.  '19.     Wages  and 

the  cost  of  living  in  New  York  City  and  Brookl>ai. 
Journal  of   Political   Economy.     20:  973-98.    D.   '12.     Economic 

theory  of  a  legal  minimum  wage.    Sidney  Webb. 
Reprinted  in  this  Handbook.      See  page   135. 
Journal  of  Poliiical  Economy.    27:  421-56.  Je.  '19.     Work  of  the 

wage-adjustment  boards.     A.  M.  Ring. 
Ladies'  Home  Journal.     36:  39.  Ap.  '19.     Should  a  woman  get 

a  man's  pay?    E.  N.  Blair. 
Nineteenth   Century.     85:  1146-64.   Je.   '19.     Labour   unrest:    its 

causes  and  its  permanent  cure.     J.  E.  Barker. 
Outlook.     106:  627-31.   Air.  21,  '14.     Profit  sharing.     A  discus- 
sion of  the  Ford  plan,     (i)    Its  defects.  G.  M.  Verity.     (2) 

Its  merits.  L.  G.  Abbott. 
Outlook.     108:  1016-18.  D.  30,  '14.     Profit  sharing  not  a  dream. 

E.  H.  Gaunt. 
Outlook.     123:  206-8.  O.  I,  '19.     Time  to  call  a  halt  to  organized 

labor.     R.  Spillane. 
Reely,  Mary  K.    Selected  articles  on  the  minimum  wage.     H.  W. 

W^ilson  Co.  N.  Y.  191 7. 
Ryan,  J.  A.     A  living  wage.     Macmillan.     190(5. 
Survey.     41  :    905.    Mr.    22,    '19.      Staliilizing      industry  by   wago 

zones. 
System.     25 :  604-9.  Je-   'i4-     Paying  more  than   wages.     G.  L. 

Louis. 
U.    S.    Bureau   of   Labor   Statistics.      Bulletin    146.    Ap.   28,    '14. 

Wages    and    regularity    of    employment    and    standardization 

of  piece  rates  in  the  dress  and  waist  industr\^  of  New  York 

City.    N.  L  Stone. 
World's  Work.     28:  316-20.  Jl.  '14.     Profit  sharing  for  savings. 

W.  C.  Procter's  successful  plan.     J.  R.  Rankin. 
World's  Work.     38:  625-32.  O.  '19.      Wages  and  profit-sharing 

delusions.     I.  Crowther. 

Hours  of  Work 

American  Federationist.  21:  1 12-14.  F-  'i4-  Trend  to  eight-hour 
day.     F.  J.  Calvert. 

.\iTierican  Labor  Legislation  Review.  7:  155-67.  Mr.  '17.  Eight- 
hour  day  and  six-daj'  week  in  the  continuous  industries. 
W.  B.  Dickson. 


BlBL10(iRAPHY  xv 

Annals  of  the  American  Academy.     83:  202-32.  My.  '19.     Hours 

of  labor  in  foreign  countries.     L.  Magnusson. 
Goldmark,   Josephine.     Fatigue   and    etticicncy.      Russell     Sage 

Foundation,  N.  Y.   1912. 
Literary  Digest.    60:  121-4.  Mr.  15,  '19.     What  is  an  eight-hour 

day? 
New  Republic.     18:  7-9.  F.  i,  '19.     Forty- four  hour  week. 
New    Repubhc.      18:  247-9.    Mr.    22,    '19.      Hours    movement    in 

England.     G.  D.  H.  Cole. 

Reprinted    in    this    Handbook.      See   page    158. 

New  Statesman.     12:  540.  Mr.  22,  '19.     Coal  situation. 

Public.     22:  701-2.  Je.  S,  '19.     Six  hour  day. 

Quarterly  Journal  of  Economics.  33:  555-9.  My.  '19.  Peculiar 
eight-hour  problem  affecting  longshore  labor.     W.  Z.  Ripley. 

Science,  n.  s.  49 :  424-5.  My.  2,  '19.  Physiology  of  the  working 
day. 

Spectator.  122:258-9.  Mr.  i,  '19.  Labour  demands  in  the  coal 
trade. 

L^.  S.  Bureau  of  Labor  Statistics  Bulletin.  No.  221.  April,  1917. 
Hours,  fatigue,  and  health  in  British  munition  factories. 

U.  S.  Bureau  of  Labor  Statistics  Bulletin.  No.  230.  1917.  In- 
dustrial  efficiency  and   fatigue  in   British  munition   factories. 

Texure  of  Employment 

American  Labor  Legislation  Review.  4:  294-9.  My.  '14.  The 
struggle  against  unemployment.     C.  R.  Henderson. 

American  Labor  Legislation  Review.  5:  184-9.  'i5-  Regulari- 
zation  of  industry. 

Andrews,  Irene  O.  Relation  of  irregular  employment  to  the 
living  wage  for  women.  American  Association  for  Labor 
Legislation.     N.  Y.   1915. 

Beveridge,   W.   H.     L'nemployment.   Longmans.    1918. 

Harper's  Magazine.  131  :  70-2.  Je.  '15.  L^nemployment  and 
business.     Elbert  H.  Gary. 

Kellor,  Frances  A.     Out  of  work.     Putnam.  191 5. 

Lescohier,  Don  D.     Labor  market.     Macmillan.   1919. 

Monthly  Labor  Review  (U.  S.  Bureau  of  Labor  Statistics.), 
p.  10-29.  Ag.  '18.  Labor  Survey  of  Cleveland  Cloak  industry. 
Boris  Emmet. 

Monthly  Labor  Review  (U.  S.  Bureau  of  Labor  Statistics).  9: 
245-8.  N.  '19.  A  permanent  program  for  stabilizing  employ- 
ment in  New  York  State. 

Reprinted    in    this    Handbook.      See    page    i?o. 


xvi  BIBLIOGRAPHY 

Rowntree,  B.  Seebohni.  The  way  to  industrial  peace  and  the 
problem  of  unemployineut.     Unwin.  London.  1914. 

Survey.  31 :  541-2.  F.  7,  14.  The  crying  need  for  connecting 
up  the  man  and  the  job.     Frances  A.  Kellor. 

Survey.  33:  48-50.  O.  10,  '14.  Unemployment  and  pubhc  re- 
sponsibility.    C.  S.  Barnes. 

Trade   Unionism 

Academy  of  Political  and  Social  Science  (N.  Y.)  Proceedings. 
8:  211-18.  F.  '19.  Collective  bargaining,  the  democracy  of 
industry.     R.  J.  Caldwell. 

American  Economic  Review.  6:  549-67.  S.  '16.  Collective  bar- 
gaining in  the  glass-bottle  industry.     Leo  Wolman. 

Reprinted  in   this   Handbook.      See  page   220. 

American   Economic   Review.     8:    752-62.    D.    '18.     Closed    shop 

versus  open  shop.     H.  E.  Hoagland. 

Reprinted    in    this    Handbook.      See    page    245. 
American    Federationist.      21  :    537-48,   621-35.    Jl.-Ag.    '14.     The 

American    labor    movement;    its    makeup,    achievements    and 

aspirations.     Samuel   Gompers. 

American  Industries.  14:  12-13.  My.  '14.  What  collective  bar- 
gaining means.    James  A.  Emery. 

American  Industries.  14:  21-3.  O.  '14.  Labor  monopoly,  the 
arch-enemy  of  industry.     IT.  G.  Otis. 

American  Industries.  14:  12-15.  D-  'i4-  Labor  combinations 
and  the  Clayton  act.     J.  A.  Emery. 

American  Journal  of  Sociology.  19:  753-60.  My.  '14.  Func- 
tional industrial  relationships  and  the  wage  rate.     P.  L.  Vogt. 

American  Journal  of  Sociology.  20:  170-80.  S.  '14.  Professor 
Hoxie's   interpretation   of   trade   unionism.      E.    H.    Downey. 

American  Law  Review.  51 :  801-32.  N.  '17.  Power  and  duty 
of  the  state  to  settle  disputes  between  employer  and  em- 
ployees.    G.  S.  Ramsay. 

Annals  of  the  American  Academy.  69:  214-22.  Ja.  '17.  Shall 
free  collective  bargainiii'j^  l)e  maintained.     C.   H.   Mote. 

Annals  of  the  American  Academy.  85 :  166-79.  S.  '19.  Labor 
agreements  with  a  powerful  union.     J.  M.  Moses. 

Annals  of  the  American  Academy.  85:  214-19.  S.  '19.  The  or- 
ganization of  an  open  shop  under  the  Midvale  plan.  E. 
Wilson. 

Fortnightly   Review.      loi :  893-904.   My.   '14.     Industrial   unrest 
from  labour's  standpoint.     Frank  Smith. 
Also   in   Living  Age.      281:    771-9.     Je.      27,   '14. 


BIBLIOGRAI'HY  xvii 

Forum.    62:  513+.  D.  '19.     The  closed  shop — to  the  bar. 

Groat,  G.  G.  Introduction  to  the  study  of  organized  labor. 
Macmillan.     1916. 

Hoxie,  R.  F.  Trade  unionism  in  the  United  States.  Appleton. 
1917. 

Independent.  79:  182-3.  Ag.  3,  '14.  Union  unionism.  G.  Doug- 
las Wardrop. 

Marot,  Helen.     American  labor  unions.     Holt.  1914. 

Nineteenth  Century.  19:  812-23.  N.  '19.  The  grave  industrial 
problem :  output  and  reward.    Leslie  Scott. 

Political  Science  Quarterly.  33:  396-439.  S.  '18.  Collective  bar- 
gaining before  the  Supreme  court.     T.  R.  Powell. 

Public.     22:  895-6.  Ag.  23,  '19.     Unionizing  the  profession. 

Quarterly  Journal  of  Economics.  26:  425-43.  My.  '12.  National 
and  district  systems  of  collective  bargaining  in  the  United 
States.    G.  E.  Bamett. 

Review  of  Reviews.    60:  441-2.  O.  '19.    Trade  union  college. 

Review,  i :  678-9.  D.  20,  '19.  Labor  not  a  commodity.  J. 
Laurence  Laughlin. 

Robbins,  E.  C.  Selected  articles  on  the  open  versus  closed 
shop.    H.  W.  Wilson  Co.  N.  Y.  1912. 

Science,  n.  s.  49:  487-9.  My.  23,  '19.  Union  of  scientific  federal 
employees.     R.  H.  True  and  P.  G.  Agnew. 

Survey.  32:  360.  Jl.  4,  '14.  The  Clayton  bill  and  organized 
labor.    Edwin  Witte. 

Survey.  32:  632-3.  S.  26,  '14.  The  way  of  the  transgressor  in  a 
closed  shop  city.     J.  A.  Fitch. 

Survey.  33 :  191-3.  N.  21,  '14.  The  changing  American  Federa- 
tion of  Labor.     F.  T.  Carlton. 

Survey.    41  :  857.  Mr.  15,  '19.     International  charter  of  labor. 

U.  S.  Bureau  of  Labor  Statistics.  Bulletin  144.  Industrial  court 
of  the  cloak,  suit  and  skirt  industry  of  New  York  Cit>'. 
C.  H.  Winslow. 

Unpopular  Review.  5 :  254-74.  Ap.  '16.  Organized  labour  and 
democracy.     W.  G.  Merritt. 

Webb,  Sidney  and  Beatrice.  Industrial  democracy.  Longmans. 
1902. 

Labor  Disputes  and  Adjustment 

Academy   of  Political   Science.      (N.   Y.)    Proceedings.   Vol.   7. 

no.  I.  1917.     Labor  disputes  and  public  service  corporations. 
Barnett,  G.  E.  and  McCabe,  D.  A.     Mediation,  investigation  and 

arbitration  in  industrial  disputes.   1916. 


xviii  lUnUOGkyVPHY 

Cohen,  Julius  Henry.     Law  and  ordei"  in  industry-.     Macmillan. 

1916. 
Contemporary    Review.      116:  496-503.    N.    '19.      Labour    unrest 

and  the  need  for  a  national  ideal.    B.  Seebohm  Rowntree. 
Laidler,  H.  W.    Boycotts  and  the  labor  struggle.    Appleton.  1913. 
Literary  Digest.     63:  14-15-  N.  29,  '19.     Labor's  right  to  strike. 
Mote,  C.  H.     Industrial  arbitration.     Bobbs-Merrill.  1916. 
North   American    Review.     200:    35-44-   Jl-   '^4-     The   Colorado 

strike.    E.  M.  Ammons. 
Survey.'    32 :304-5.     Jc.   13,  '14.     The  closed  siiop  and  the  laljor 

boycott.    H.  W.  Laidler. 
Survey.     32:  397-99.   Jl.    n,   '14.      Collective   bargaining   and  in- 
dustrial unrest.     J.  A.   Fitch. 
Survey.     42:  399-401.  Je.  7,  '19.     Australian   system   of  dealing 

with  labor  disputes.    G.  Beeby. 

Reprinted   in    this    Handbook.      See   page    272. 

Survey.  43:  53-56,  86,  91.  N.  8,  '19.  The  closed  shops  and 
other  industrial  issues  of  the  steel  strike.    J.  A.  Fitch. 

U.  S.  Bureau  of  Labor  Statistics.  Bulletin  Whole  No.  233.  July 
1918.  Operation  of  the  Industrial  Disputes  Act  of  Canada. 
B.  M.  Squires. 

I.NDUSTRiAL  Insurance 

American  Economic  Review.  5:  221-78.  Je.  'i5-  Field  of  work- 
men's compensation  in  United  States.    W.  C.  Fisher. 

Academy  of  Political  Science.  (N.  Y.)  Proceedings.  8:  286-90. 
F.  '19.  Government's  responsibility  for  disabled  industrial 
workers.     T.  B.  Love. 

American  Labor  Legislation  Review.  4:  47-72.  Mr.  '14.  The 
practicability  of  compulsory  sickness  insurance  in  America. 
J.  P.  Chamberlain. 

American  Labor  Legislation  Review.  4:  82-91.  Mr.  '14.  Trade 
union  sickness  insurance.    J.  M.  Lynch. 

American  Labor  Legislation  Review.  5:  265-78.  Je.  '15.  Un- 
employment insurance.     O.  S.  Halsey. 

American  Labor  Legislation  Review.  6:  123-6.  Je.  '16.  Is 
health  insurance  paternalism?     W.  Hard. 

American  Labor  Legislation  Review.  6:  155-236.  Je.  '16.  Brief 
for  health  insurance. 

American  Labor  Legislation  Review.  6:  174-85.  Je.  '16.  Meet- 
ing the  wage  loss  due  to  illness. 

American  Labor  Legislation  Review.  9:  107-14.  Mr.  '19.  Next 
step  in  social  insurance  in  United  States. 


BIBLlOC.kAl'JlV  xix 

American  Journal  of  Public  Health.  8:  883-7.  D.  '18.  Rela- 
tion of  wages  to  the  public  health.  B.  S.  Warren  and  E. 
Sydenstricker. 

American  Journal  of  Public  liealth.  8:  943-4.  D.  '18.  Health 
insurance  from  its  medical  and  hospital  aspects.  J.  A. 
Lapp. 

Gibbon,  I.  G.    Unemployment  insurance.     King.  London.  191 1. 

Independent.  96:  445-7.  D.  28,  '18.  Group  insurance  stabilizes 
labor.    W.  E.  Underwood. 

Industrial    Management.      57:  154-6.    F.    "19.      Group    insurance. 
H.  W.  Kirrball. 
Reprinted    iu    this    liandbook.      See    paye    3-'4. 

National  Conference  of  Charities  and  Correction.     Proceedings 

Fort  Wa3Tie  Ind.  1914 :  346-55.     American  problems  in  social 

insurance.     F.  L.  Hoffman. 
National  Conference  of  Charities  and  Correction.  Proceedings. 

Fort  WajTie,  Ind.  1914:  355-9.     The  right  of  the  worker  to 

social  protection.     C.  R.  Henderson. 
Nineteenth  Century.     85:  862-75.  My.  '19.     Right  to  idle.     J.  A. 

R.  Marriott. 
North    American    Review.    209:  490-8.    Ap.    '19.       Compulsory 

health   insurance.     H.   Cheney. 
Rubinow,  I.  M.     Social  insurance.     Holt.   1914. 
Survey.     32:  23-8.  O.  3,  '14.     The  new  stage  in  compensation. 

W.  Benedict. 
Survey.     42 :  240.  My.   10,  '19.     Insurance  and  doles. 

Housing 

American  City.  20:  23-5.  Ja.  '19.  Housing  the  workers — an 
unfinished  job.     G.  Gore. 

Annals  of  the  American  Academy.  Vol.  51.  No.  i.  Ja.  '14.  Hous- 
ing and  town  planning. 

Annals  of  the  American  Academy.     81 :  51-5.  Ja.  '19.     Housing 
and  transportation  problems  in  relation  to   labor  placement. 
John  Ihlder. 
Reprinted   in  this   Handbook.      See  page   339. 

Architectural  Record.  45 :  21-5.  Ja.  '19.  United  States  housing 
corporation. 

Architectural  Record.  45 :  123-41.  F.  '19.  Government's  hous- 
ing at  Bridgeport,  Conn. 

Architectural  Record.  45:  567-72.  Je.  '19.  Future  of  industrial 
housing.     S.  Baxter. 

Bankers  Magazine.  96:  248-9.  F.  '18.  Problem  of  industrial 
housing.    N.  F.  Hoggson. 


XX  BIBJJOGr>LAPHY 

Columbia  University  Quarterly.     21 :  147-52.  Ap.  'ig.     Industrial 

housing. 
Forum.    51:  111-14.  Ja.  '14.     Cost  of  a  decent  home.     C.  Arono- 

vici. 
Hibbert  Journal.     17:  387-90.  Ap.  '19.     Worker  on  his  home. 
House    Beautiful.      44:  379-81.    D.    '18.      Greatest    landlord    in 

America;     Yorkship    Village    near    Camden,    N.   J.      C.    W. 

Moores. 
Literary  Digest.    60:  22-3.  Mr.  15,  '19.     England's  housing  plans. 
Nation.     98:  76-7.  Ja.  22,  '14.     First  garden  city.     Letchworth. 
New  Statesman.     13:  7-8.   Ap.   5,   '19.     Housing  of  the  people. 
Public.     22:  155-7.    F.    15,    '19.      Housing  issue    in  the    United 

States.     C.  H.  Whitaker. 
Public.    22:  649.  Je.  21,  '19.     Housing  solution. 
Scientific  American.     120:  4.  Ja.  4,  '19.     Factory  and  the  home. 
Survey.     41 :  585-92.    F.    i,    '19.      Government's  model    village. 

R.  S.  Childs. 
Survey.     42:  152-4.  Ap.  26,  '19.     Housing  workers  in  a  powder 

plant. 
Survey.     42:   341.    My.    31,    '19.      Housing    in    a    reconstruction 

program.     R.  D.  Kolm. 

WoMKN  IN  Industry 

Academy  of  Political  Science  (N.  Y.)  Proceedings.  8:  139-40. 
F.  '19.    Women  in  industry.    M.  E.  Dreier. 

American  Journal  of  Public  Health.  9:  367-8.  My.  '19.  Med- 
ical argument  against  night  work  especially  for  women  em- 
ployees.    E.  R.  Hayhurst. 

American  Journal  of  Sociology.  24:  528-65.  Mr.  '19.  Probable 
economic  future  of  American  women.     D.  Sneddeii. 

Annals  of  the  American  Academy.  81 :  123-9.  Ja.  '19.  Wages 
for  women  workers.     M.  Anderson. 

Bennett,  Helen  M.     Women  and  work.  Appleton.   191 7. 

Coal  Age.  12:  888-9.  N.  24,  '17.  Women  in  industry.  Alex- 
ander Moss. 

Dial.  67:  45-7-  Jl.  26,  '19.  Women  in  British  industrv.  G.  D.  H. 
Cole. 

Fortnightly  Review.  lii :  63-76.  Ja.  '19.  Equal  pay  for  equal 
work.     G.  M.  Tuckwell. 

Iron  Age.  loi :  206-10.  Ja.  17,  '18.  Women's  labor  in  British 
war  industries.     L.  H.  Quin. 

Ladies'  Home  Journal.  36:39.  Ap.  '19.  Should  a  woman  get  a 
man's  pay.     E.  N.  Blair. 


BIBLIOGRAi'HY  xxi 

Ladies'  Home  Journal.  36:  55-6.  Ap.  '19.  The  English  wo- 
man who  worked.     M.  Bloomfield. 

Ladies"  Home  Journal.  36:51-2.  My.  '19.  What  the  English 
working  woman  has  proved.     M.  Bloomfield. 

Ladies'  Home  Journal.  36:  47-8.  Je.  '19.  The  Englishwoman 
after  the  war.     M.  Bloomfield. 

Literary  Digest.  62:  74.  Jl.  19,  '19.  Limitations  of  woman 
workers. 

Nineteenth  Century.  76:  384-93-  Ag.  '14.  Women's  wages  and 
the  laws  of  supply  and  demand.     E.  Gore-Booth. 

Quarterly  Review.  232:  73-89-  Jl-  'i9-  Economic  future  of  wo- 
men in  industry.     L.  Macassey. 

Schreiner,  Olive.     W^oman  and  labour.  Unwin.  London.  1914. 

Scribner's  Magazine.  65:  113-16.  Ja.  '19.  Women  and  heavy 
war  work.     W.  G.  Thompson. 

Survey.     41 :  868-9.  Mr.  15,  '19.     W^omen  workers'  platform. 

U.  S.  Bureau  of  Labor  Statistics.  Bulletin.  No.  175.  Summary 
of  report  on  condition  of  women  and  child  wage  earners  in 
the  United  States. 

L'.  S.  Bureau  of  Labor  Statistics.  Bulletin.  No.  223.  1917.  Em- 
ployment of  women  and  juveniles  in  Great  Britain  during  the 
war. 


SELECTED  ARTICLES  ON 
PROBLEMS  OF  LABOR 

INTRODUCTION 

The  aim  ol  this  volume  is  to  present  a  useful  and  well- 
organized  body  of  material  dealing  with  the  principal  topics  in 
what  we  have  commonly  learned  to  style  the  labor  problem. 

The  title  of  this  book,  it  will  be  noticed,  is  not  the  Labor 
Problem,  but  the  Problems  of  Labor.  And  in  this  circumstance 
(it  is  not  an  accident)   lies  an  important  suggestion. 

Careful  observers  of  labor  conditions  know  that  there  is  no 
such  thing  as  a  simple  labor  problem.  There  arc  labor  prob- 
lems. These  problems  are  many,  but  they  lend  themselves  to  a 
certain  degree  of  definite  grouping. 

Now  without  some  attempt  at  analytical  grouping  or  an  ar- 
rangement of  the  main  topics  of  importance  in  this  field,  there 
is  the  danger,  as  is  frequently  manifest  in  public  discussion  of 
the  subject,  of  a  confusion  of  terms.  One  man  speaks  on  the 
"Labor  Problem,"  and  he  deals  with  just  one  phase  of  trade 
union  activity.  To  his  mind,  that  sums  up  the  labor  problem 
as  he  sees  it,  but  his  auditors  remain  unsatisfied.  Another,  on 
the  same  subject,  deals  only  with  one  phase  of  a  possible  "solu- 
tion" of  the  labor  situation.  In  the  absence  of  clean-cut  defini- 
tion of  terms  to  start  with  he  goes  on  to  present  what  is 
dangerously  like  a  panacea. 

No  man  who  is  aware  of  the  manifold  phases  of  the  labor 
situation  could  lend  himself  to  the  advocacy  of  specifics  in  in- 
dustrial matters.  Simple  remedies  in  labor  relations  are  for  the 
simple  minded  who  view  the  action  taking  place  through  a  knot- 
hole in  the  fence;  they  won't  do,  for  those  who  pay  the  price 
of  admission  and  get  a  full  view  of  the  complications  and  many 
sided  aspects  of  the  matter. 

The  price  of  admission,  it  should  be  said,  is  earnest  study  of 
the  subject,  a  willingness  to  spend  time  and  energj-  on  it,  and  a 


2  SELECTED    ARTICLES 

realization  of  its  overshadowing  importance.  It  is  this  im- 
portance which  justifies  the  very  best  attention  and  study  that 
can  be  given,  and  condemns  in  advance  oversimphfied,  proprie- 
tory schemes  advertised  as  sure  remedies  for  industrial  ills. 

A  most  encouraging  fact  in  the  present  situation  as  it  affects 
our  country  is  the  large  and  growing  number  of  industrial  execu- 
tives, and  students  of  labor  questions  who  have  definitely  turned 
their  backs  on  panaceas  and  are  approaching  all  industrial  ques- 
tions with  what  might  be  called  the  engineering  sense.  By  this 
I  mean  that  attitude  of  mind  which  believes  that  all  decision  and 
action  must  be  founded  on  carefully  organized  data,  on  as- 
semblage of  the  best  available  material  and  information,  and  on 
a  reasonably  close  acquaintance  with  the  successes  and  failures 
that  have  attended  various  experiments  in  labor  relations. 

Equipped  with  such  knowledge,  the  field  of  labor  problems, 
takes   on   a    new   meaning. 

A  wide  range  of  interests  opens  up,  more  than  one  method 
or  formula  seems  to  be  feasible.  There  is  a  challenge  to  re- 
sourcefulness, human  insight,  and  constructive  imagination. 
Capable  executives  welcome  such  a  call  on  their  intelligence. 
There  is  something  in  it  of  that  quality  that  they  have  learned 
to  meet  in  other  phases  of  their  administrative  work.  The\'  liave 
made  up  their  minds,  being  men  of  capacit}',  that  dealing  with 
questions  of  human  nature  in  industrial  organization  could  not 
be  an  easier  task  than  settling  any  other  problems  in  their  busi- 
ness  experience. 

So  with  a  grasp  of  the  size  of  their  job,  they  turn  to  serious 
study  of  its  elements.  And  this  indeed  is  the  typical  attitude 
of  all  earnest  students  of  labor  problems  whether  their  field  be 
academic,  or  industrial  and  commercial.  They  distrust  glibness. 
facile  prospectus,  specious  cure — also — they  hold  fast  to  the 
liard  realities  the  chief  ot  which  is  persistent  thinking  on  the 
problem,   or  rather   group   of   problems. 

To  this  commendable  end  of  sober,  persevering  study  of  the 
labor  situation  this  book  is  a  contribution.  It  has  organized 
the  necessary  data  under  logical  headings.  While  it  does  not 
pretend  to  have  exhausted  the  subject,  something  a  single  volume 
could  not  do,  it  presents  from  the  most  authoritative  source, 
various  aspects  of  labor  questions  and  experiments  in  labor 
relations  which  at  the. present  time  are  of  the  greatest  interest 
to  the  largest  number  of  persons. 


PROBLEMS   OF  LABOR  3 

It  is  my  conviction  that  a  collection  such  as  this  is,  repre- 
senting all  points  of  view  is  of  more  value  than  a  book  by  one 
author  or  representing  one  point  of  view  can  possibly  be,  and 
that  a  careful  reading  of  this  book  will  make  good  return  in 
a  broader  grip  on  the  subject,  and  possibly  in  pointing  the  way 
along  which  intelligent  experimentation  holds  out  a  promising 
measure  of   results. 

January  22,  1920.  Meyer  Bloomfield. 


GENERAL 


THE    CENTRAL    PROBLEMS' 

The  first  problem  of  reconstruction  is  the  Business  Man. 
As  Brooks  Adams  said  four  years  ago,  in  his  impressively  con- 
servative book  on  "The  Theory  of  Social  Revolutions,"  the 
modern  business  man — "capitalist,"  Mr.  Adams  calls  him— has 
been  evolved  under  "the  stress  of  an  environment  which  de- 
manded excessive  specialization  in  the  direction  of  a  genius 
adapted  to  money-making  under  highly  complex  industrial  con- 
ditions," to  which  "money-making  attribute  all  else  has  been 
sacrificed,"  so  that  he  "thinks  in  terms  of  money  more  ex- 
clusively than  the  French  aristocrat  or  lawyer  ever  thought  in 
terms  of  caste."  With  this  socially  blind  and  for  the  present 
politically  powerful  class,  our  country  must  reckon  thoughtfully 
and  justly.  To  the  extent  that  reconstruction  solutions  make 
it  necessary  to  subordinate  accustomed  proprietary  interests  to 
justice  and  fair  dealing,  uncompromising  opposition  must  be  ex- 
pected from  all  business  interests  that  are  rooted  in  or  affiliated 
with  monopoly. 

The  second  problem  of  reconstruction  is  Labor.  We  have 
become  so  habituated  to  thinking  of  labor  exclusively  in  terms 
of  "hiring"  and  "firing"  and  "wages"  and  "labor  turnover,"  and 
"lower  classes,"  that  we  neglect  vital  distinctions.  We  nuist 
learn  to  realize  that  labor  is  the  antithesis  of  idleness,  not  of 
capital  or  business,  not  of  industrial  investment,  leadersliip  or 
management.  It  ranges  all  the  way  from  the  most  impoverished 
worker  to  the  most  prosperous  manager  of  work,  in  so  far  as 
their  work  is  socially  useful.  When,  therefore,  we  think  of 
Labor  as  wage-working  classes  in  contradistinction  to  employ- 
ing classes,  we  find  ourselves  in  a  dizzy  whirlpool  of  thought — 
the  so-called  "conflict  of  labor  and  capital."  But  since  we  must 
take  the  public  mind  as  we  find  it,  we  shall  have  to  face  the 
labor  problem  as  a  conflict  between  employing  classes  and  wage- 

'  By   Louis    F.    Post.      Everybody's.     40:60.     February,    1919. 


6  SELECTED   ARTICLES 

working  classes.  Yet  we  may  think  of  tlie  former  as  composed 
of  useful  workers  as  well  as  privileged  idlers,  and  of  the  latter 
as  a  class  of  which  some  are  as  parasitical  as  the  idle  rich, 
though  less  expensive  to  society.  We  must  not  forget,  either, 
that  all  of  us  depend  upon  the  wage-working  class  for  a  living. 
This  is  an  impressive  fact  which  the  "labor  shortage"  in  war 
time  has  emphasized.  We  must  realize,  too,  that  all  wage- 
workers  depend  for  work  upon  working  opportunities  which 
employing  classes  control — many  of  which  they  control  arbi- 
trarily, unjustly  and  destructively. 

Those  two  problems  are  factors  in  every  other  problem  of 
reconstruction.  If  legitimate  and  useful  business  interests  con- 
tinue their  alliance  with  privileged  and  harmful  business  in- 
terests, or  if  wage-working  interests  continue  to  be  dealt  with 
as  if  the  relationship  of  Business  to  Labor  were  one  of  master 
class  to  working  class,  then  the  other  reconstruction  problems 
will,  of  necessity,  be  inefficiently  and  dangerously  dealt  with. 
But  if  reasonable  solutions  of  the  business-man  problem  and  the 
labor-class  problem  are  accepted,  other  reconstruction  problems 
will  almost  solve  themselves. 

The  more  conspicuous  among  the  subsidiary  problems  may 
be  summarized  about  as  follows : 

(i)  Collective  har gaining  between  organized  business  and 
organized  labor.  This  would  lead  to  reasoned-out  and  coopera- 
tive adjustments  of  labor  disputes. 

(2)  An  open  tkoroiighfare  to  natural  resources  for  all  work- 
ers. Their  socialization  in  permanent  and  convenient  locations 
under  assurances  of  profitable  and  congenial  work,  such  as  gov- 
ernment could  wisely  give,  would  solve  a  multitude  of  recon- 
struction problems;  for  it  would  automatically  maintain  the 
general  supply  of  employable  workers  at  a  level  likely  to  prevent 
unreasonable  exactions  by  Labor  and  oppressive  exploitations 
by  Business. 

(3)  Perpetuation  of  public  ownership  of  the  postal,  rail- 
road and  telegraphic  service,  and  extension  of  the  principle  to 
all  other  utilities  which  emanate  from  the  public  in  order  to  be 
operated  for  the  public.  This  would  subordinate  to  common  uses 
those  national  agencies  of  common  service  which  have  been  too 
long  at  the  mercy  of  money-making  specialists. 

(4)  Socialisation  of  the  social  value  of  all  privately  owned 
natural    resources.      This     would   put    an   end    to    capitalistic 


PROBLEMS   OF  LABOR  7 

monopolies  of  water-power,  of  oil  and  other  mineral  deposits, 
of  natural  forest  growths,  of  unused  agricultural  and  grazing 
areas,  and  of  city  sites.  For  those  resources  we  are  indebted 
to  nature,  not  to  financial  legerdemain;  and  for  their  values  we 
are  indebted  to  social  progress,  not  to  antique  ancestors.  It 
would  also  abolish,  or  at  least  greatly  lighten,  the  burdens  of 
taxation  on  useful  business  operations. 

Other  reconstruction  problems  confront  us.  Some  may  be 
different  in  form  of  statement,  but  in  substance  most  of  them 
differ  hardly  at  all  from  those  enumerated  above.  Whatever 
they  may  be,  however,  there  are  few,  if  any,  but  will  glide  into 
their  places  without  much  friction  and  be  solved  with  a  mini- 
mum of  confusion  if  the  enumerated  problems  are  dealt  with 
in  social  good  faith  and  with  administrative  intelligence. 


FUNDAMENTALS    OF    THE    INDUSTRIAL 
PROBLEM' 

Increased  production,  increased  saving,  increased  confidence 
— these  are  the  three  keys  to  the  whole  industrial  problem. 

Production  may  be  hampered  either  in  pursuance  of  a  de- 
liberate policy,  or  simply  by  the  use  of  inefficient  methods.  The 
interest  of  Employers,  as  a  general  rule,  is  to  increase  output, 
the  danger  of  over-stocking  being  met  by  improved  distributive 
organisation  and  the  opening  up  of  new  markets.  Cases  of  re- 
striction for  the  sake  of  keeping  up  pi-ices  occur  mainly  in  con- 
nection with  monopoly  products,  and  the  problem  of  counter- 
acting the  influences  which  make  for  restricted  output  in  these 
cases  deserves  a  more  careful  study  than  has  yet  been  given  to 
it.  There  is  also  a  tendency,  perhaps  unconscious,  on  the  part 
of  some  employers  to  throw  obstacles  in  the  way  of  increased 
output  due  to  the  exceptional  efficiency  of  employees.  They 
would  rather  have  a  smaller  output  produced  by  men  receiving 
wages  not  above  the  customary  limit  than  an  increased  output 
produced  by  men  earning  exceptionally  high  wages.  This  policy 
is  not  only  unjust  to  the  men  concerned;  it  is  shortsighted  and 
uneconomic  from  the  point  of  view  of  the  employer's  own  in- 
terests.    On  the  other  hand,  the  interest  of  the  individual  em- 

^  From  Garton  Foundation  Memorandum  on  the  Induitrial  Situation 
after    the    war.      Rct.    ed.     Januai^,    1919.      pp.      129-55. 


8  SELECTED   ARTICLES 

ployer  in  maintaiimig  a  liigii  standard  of  quality  cannot  be  tiken 
for  granted,  so  long  as  large  profits  can  be  derived  from  the 
sale  of  inferior  goods.  Stronger  action  on  the  part  of  trade 
associations,  and  more  general  education  of  the  purchasing  pub- 
lic in  standards  of  value,  are  needed  both  in  the  national  interest 
and  in  that  of  producers  of  high  class  goods. 

Much  of  the  limitation  of  output  on  the  part  of  employers 
arises  from  inefficiency  in  management — conservation  in  methods, 
the  retention  of  badly  planned  works  and  out-of-date  plant,  bad 
organisation,  neglect  of  scientific  research,  the  presence  of 
"deadheads"  on  the  office  staff.  There  is  some  reason  to  hope 
that  the  experiences  of  the  v^^ar  and  the  keenness  of  competition 
after  it  may  lead  to  greater  attention  being  paid  to  these  points. 

The  limitation  of  output  by  labour  arises  partly  from  the 
legitimate  desire  to  restrict  the  hours  of  work  in  the  interest 
of  health,  education,  family  life  and  enjoyment.  These  are  con- 
siderations of  social  welfare  which  cannot  be  set  aside.  We 
must  look  for  greater  production  ratlier  from  increased  effi- 
ciency than  from  an  increase  in  the  number  of  hours  worked. 
There  are,  however,  large  sections  of  labour  by  whom  a  further 
limitation  of  output  is  deliberately  practised  in  the  assumed  in- 
terests of  their  class  as  a  whole.  In  some  cases  the  motive  is 
the  honest  but  mistaken  belief  that  the  less  work  each  man  does 
the  more  there  will  be  to  go  round.  "Work"  is  regarded  as  an 
exhaustible  fund,  or  at  the  best  as  a  diminishable  flow,  and  it  is 
assumed  to  be  in  the  interests  of  his  class  that  each  man  should 
"use  up"  as  little  as  possible.  The  fallacy  lies  in  the  concep- 
tion of  an  inelastic  "wages  fund."  Wages  come  out  of  the 
stream  of  products,  and  other  factors  remaining  constant,  the 
distribution  of  wages  cannot  be  widened  except  by  an  increase 
of  the  stream.  In  the  case  of  trades  in  which  employment  is 
irregular  and  demand  uncertain,  the  temptation  to  slacken  work 
as  a  job  nears  completion  is  easy  to  understand,  but  the  results 
of  the  policy  are  too  wasteful  to  be  contemplated  with  satisfac- 
tion. The  remedy  must  be  sought  in  a  better  organisation  of 
the  industries  concerned  which  will  give  the  workman  greater 
security  of  tenure,  and  remove  his  fear  of  unemployment  or 
relegation  to  lower-paid  work  as  a  result  of  exercising  his 
maximum  effort.  A  further  cause  of  limitation  of  output  lies 
in  the  natural  differences  of  individual  capacity.  The  workers 
believe  that  if  each  man  were  allowed  to  produce  to  his  full 


PROBLEMS   OF  LABOR  9 

power,  the  minimum  standard  demand  by  tlie  employer  would 
be  based  on  the  performances  of  the  quickest  and  most  skilful 
and  a  "speeding-up"  process  would  be  introduced,  involving 
either  excessive  strain  or  lessened  earnings  on  the  part  of  the 
majority.  From  this  point  of  view,  restriction  of  output  is  a 
sacrifice  made  by  the  ablest  workers  in  the  interests  of  their 
fellows.  While  such  restrictions  necessarily  result  in  limiting 
the  total  output,  it  is  obvious  that  labour  cannot  fairly  be  asked 
to  remove  them  unless  some  definite  assurance  can  be  given 
against  the  evils  anticipated. 

With  regard  to  quality  of  output  it  is  obvious  that  the 
workers'  interest  lies  in  the  direction  of  a  high  standard  which 
will  improve  the  status  of  those  concerned  in  the  industry. 
Whether  from  the  point  of  view  of  earning  power  or  of  in- 
terest and  satisfaction  in  their  w'ork,  the  workmen  have  every- 
thing to  gain  by  the  standard  of  workmanship  in  their  particular 
trade  being  raised.  A  general  appreciation  of  this  fact,  re- 
sulting in  greater  attention  by  labour  organisations  to  questions 
of  craft  training  and  quality  of  output  would  do  much  both 
to  raise  the  position  of  labor  itself  and  to  strengthen  tlie  hands 
of  those  employers  who  are  striving  for  a  high  level  of  produc- 
tion, as  against  those  who  seek  to  make  their  profit  out  of  the 
bad  taste  of  bargain  hunters. 

It  is  clear  that  any  restrictions  placed  upon  production, 
whether  by  employers  or  employed,  beyond  those  based  upon 
the  social  needs  of  the  workers,  must  be  removed  if  the  difficul- 
ties of  the  economic  situation  are  to  be  faced  successfully.  In 
order  to  make  good  the  wastage  of  war  and  raise  the  general 
level  of  industrial  prosperity,  the  efforts  of  both  parties  must 
be  united  for  the  purpose  of  increasing  the  quantity  of  output 
and  improving  its  quality.  In  order  to  avoid  disastrous  con- 
flicts with  regard  to  the  distribution  of  earnings,  the  national 
income,  the  total  sum  available  for  distribution,  must  be  not 
only  maintained  but  increased.  The  prospects  of  success  de- 
pend upon  the  willingness  of  both  sides  to  face  the  facts  of  the 
situation  and  to  throw  aside  somewhat  of  their  mutual  distrust. 
It  will  be  necessary  for  labour  to  abandon  the  policy  of  restrict- 
ing output  and  to  concentrate  upon  demanding  adequate  remun- 
eration for  the  work  performed.  It  will  be  equally  necessary 
for  employers  to  recognize  that  efficient  production  is  the  only 
ultimate  source  of  profit,  that  the  policy  of  keeping  down  wages 


10  SELECTED   ARTICLES 

and  cutting  piece  rates  is  opposed  to  their  own  interests,  and 
that  industry  as  a  whole  will  benefit  by  any  rise  in  the  level  of 
craftsmanship  and  production.  There  is  to-day  an  urgent 
necessity  for  the  removal  of  all  obstacles  to  any  man  either 
working  or  earning  to  the  full  extent  of  his  capacity. 

The  argument  has  brought  us  to  the  fundamental  question 
which  underlies  all  our  industrial  troubles — the  relation  between 
employers  and  employed.  The  limitation  of  production,  whether 
by  labour  restrictions  on  output  or  cutting  of  piece  rates  by  em- 
ployers, springs  from  the  belief  that  the  interests  of  employers 
and  employed  are  inevitably  and  fundamentally  hostile.  If  it 
can  be  shown  that  their  interests  are  concurrent  as  regards  pro- 
duction and  only  partially  opposed  even  as  regards  distribution, 
the  way  will  have  been  paved  for  a  compromise  which  will 
leave  both  parties  free  to  co-operate  in  the  work  of  industrial 
reconstruction. 

The  relations  of  employers  and  employed  are  partly  antago- 
nistic as  regards  distribution,  because  it  is  to  the  interest  of  each 
to  secure  a  relatively  large  share  of  the  wealth  produced.  They 
are  not  wholly  opposed,  even  in  this  respect,  because  it  is  to 
the  interest  of  the  employer  that  his  workpeople's  standard  of 
life  shall  be  sufficiently  high  to  pi'omote  efficiency  and  afford 
a  reasonable  incentive  to  effort;  it  is  to  the  interest  of  the  work- 
man that  the  firm  shall  be  sufficiently  prosperous  to  provide 
steady  employment.  Good  work  cannot  be  expected  from  men 
who  are  ill-fed  and  insufficiently  clothed,  or  who  feel  that  they 
derive  no  advantage  from  increased  production.  Continued  em- 
ployment cannot  be  expected  from  a  firm  which  is  not  making 
a  profit  on  its  business.  The  qualification  becomes  still  more 
important  when  it  is  extended  from  the  relations  existing  in  a 
particular  firm  to  industry  as  a  whole.  It  is  to  the  interest  of 
all  employers  engaged  in  the  supply  of  common  commodities 
that  wages  as  a  whole  should  be  good,  in  order  that  the 
purchasing  power  of  their  customers  may  be  high.  It  is  to  the 
interest  of  the  workers,  who  are  also  consumers,  that  firms  pro- 
ducing articles  of  general  use  should  be  sufficiently  prosperous 
to  keep  plants  up  to  date  and  produce  well  and  clieaply. 

The  interests  of  employers  and  emploj^ed  are  concurrent  as 

regards  production,  because  it  is  to  the  benefit  of  each  that  the 

total  available  for  distribution  shall  be  as  large  as  possible.     The 

-  interest  of    the    working  class    in  increase    of  output    may  be 


PROBLEMS   OF  LABOR  n 

limited  by  other  than  economic  considerations.  They  will  not 
accept  for  the  sake  of  increased  wages  methods  of  work  which 
involve  loss  of  self-respect  or  a  narrowing  of  their  life  by  undue 
restriction  of  leisure.  To  this  extent  the  interest  of  the  em- 
ployer may  be  over-ridden  by  considerations  of  social  welfare. 
The  real  conflict  is  between  his  economic  interests  as  an  em- 
ployer of  labour  and  the  social  interests  of  the  community  of 
which  he  is  a  member.  But  the  employer  and  employed  are 
both  concerned  in  increased  efficiency  of  production,  which  im- 
plies equal  or  improved  output  at  less  cost  to  the  employer  and 
with  less  strain  to  the  employed.  Here,  too,  it  is  to  be  noted 
that  the  workman,  as  consumer,  will  benefit  by  any  increase  in 
the  general  efficiency  of  production. 

The  great  obstacle  to  co-operation  is  the  question  of  status. 
The  ill-will  of  labour  towards  capital  and  management  is  not 
wholly  a  question  of  their  respective  share  of  earnings.  Fric- 
tion arising  over  the  distribution  of  earnings  is  in  itself  due 
quite  as  much  to  a  sense  of  injustice  in  the  machinery  of  distri- 
bution as  to  the  desire  for  actual  increase  of  wages.  The  fun- 
damental grievance  of  labour  is  that  while  all  three  are  neces- 
sary parties  to  production,  the  actual  conditions  of  industry 
have  given  to  capital  and  management  control  not  only  over 
the  mechanism  of  production,  but  also  over  labour  itself.  They 
feel  that  the  concentration  of  capital  in  a  comparatively  few 
hands  has  rendered  fair  bargaining  between  the  parties  impos- 
sible. A  man  who  leaves  his  work  without  reason  inflicts  on 
his  employer  a  certain  amount  of  loss  and  inconvenience.  A 
man  who  is  dismissed  without  reason  may  lose  his  livelihood. 
While  each  great  firm  represents  in  itself  a  powerful  organisa- 
tion, apart  from  any  employers'  association  to  which  it  may 
belong,  the  men  employed  by  the  firm  are  solitary  units,  having 
no  power  of  collective  action  without  calling  in  the  trade  unions 
representing  the  whole  of  each  craft.  In  the  last  resort  the 
only  effective  weapon  of  the  trade  union  is  the  strike,  and  the 
loss  inflicted  by  a  strike  or  lock-out  on  the  capitalist  class  is 
not  comparable  with  the  acute  personal  suffering  of  the  work- 
men and  their  families.  They  feel  therefore  that  in  any  dis- 
pute the  dice  are  weighted  against  them. 

There  is  also  a  very  widespread  feeling  that  labour  as  a 
whole  is  faced  by  great  disadvantages  in  ventilating  its  griev- 
ances.    The  tribunals   are   composed,   the  press  is   owned   and 


12  SELECTED   ARTICLES 

nni,  ])3-  men  of  another  class;  and  the  complaint  is  frequently 
made  that  the  labour  representative  and  the  labour  case  do  not 
receive  the  fair  play  and  courtesy  which  would  be  extended  to 
those  of  their  "opponents." 

The  attitude  of  a  certain  section  of  employers  who  look  on 
their  employees  as  "hands,"  as  cogwheels  in  the  industrial  ma- 
chine, having  a  market  value  but  no  recognised  rights  as  hu- 
man beings,  is  bitterly  resented.  Still  more  offensive  is  the 
attitude  which  regards  the  working  man  as  a  very  good  fellow 
so  long  as  he  is  kept  in  his  place,  and  requiring  to  be  guided 
and  disciplined,  but  not  to  be  consulted  in  matters  vitally  affect- 
ing his  interests.  Labour  has  come  to  know  its  power.  It 
realises  that  it  is  an  indispensable  party  to  the  production  of 
wealth  and  it  requires  to  be  treated  frankly  as  a  partner  with 
equal  rights  and  equal  responsibilities. 

The  grievances  of  the  employers  are  no  less  valid.  They 
complain  of  deliberate  limitation  of  output,  slackness  and  ineffi- 
ciency in  work,  short  time  and  malingering,  the  lack  of  any 
feeling  of  responsibility.  They  point  out  that  many  leaders  of 
labour  opinion  carefully  discourage  any  sense  of  loyalty  to  the 
firm— the  source  from  which  the  earnings  of  capital  and  labour 
are  alike  derived— that  even  a  fair  employer  can  feel  no  con- 
fidence that  his  workmen  will  back  him  up  in  a  pinch.  Any 
effort  to  improve  the  condition  of  the  employees  is  regarded  as 
a  concession  extorted  from  weakness  and  is  followed  by  further 
demands  which  bear  no  relation  to  the  condition  of  trade. 
Every  period  of  prosperity  produces  a  demand  for  higher 
wages;  but  no  amount  of  depression  is  considered  as  an  excuse 
for  reverting  to  a  lower  scale.  The  trades  union  wage  regu- 
lations place  obstacles  in  the  way  of  differentiation  between  the 
efficient  and  industrious  workman  and  those  who  are  less  skilled 
or  less  hardworking.  At  the  same  time  they  render  it  impos- 
sible to  continue  in  employment,  without  actual  loss,  men  whose 
capacity  for  production  has  been  decreased  by  age  or  accident. 

The  gravest  complaint,  however,  relates  to  the  insecurity  of 
bargaining.  The  employer's  power  to  negotiate  directly  with 
his  employees  is  restricted  by  the  union,  yet  bargains  thus  made 
with  the  men's  accredited  representatives  are  continually  broken 
by  those  whom  they  profess  to  bind  and  the  union  itself  cannot 
enforce  the  agreement  which  it  has  made. 

So  long  as  the  fundamental  interests  of  employers  and  em- 


PROBLEMS   OF    LABOR  U 

ployed  are  believed  by  the  majority  to  be  purely  antagonistic,  no 
cure  for  the  grievances  of  either  side  is  likely  to  be  found,  since 
the  wrongs  of  which  both  sides  complain  spring  from  that  very 
feeling  of  hostility  and  suspicion. 

The  limitation  of  production  carries  with  it  a  limitation  of 
the  possible  amount  of  savings.  If  the  total  amount  produced 
is  low,  the  balance  of  production  over  consumption  will  be  low- 
also.  But  class-hostility  hampers  .-^aving  in  other  ways.  The 
supposed  clash  of  interests  destroys  the  sense  of  responsibility 
in  the  use  of  wealth.  Discontent  with  economic  conditions  is 
productive  of  reckless  expenditure.  The  man  who  feels  his 
conditions  of  Ufe  to  be  unworthy  has  no  incentive  to  save,  be- 
cause he  has  no  hope  of  substantial  improvement  in  his  condi- 
tion. The  worse  that  condition  is,  the  greater  is  his  need  of 
amusement  and  palliatives  to  render  it  bearable.  Sound  invest- 
ment is  discouraged  because  the  prospect  of  repeated  outbreaks 
of  industrial  warfare  makes  confidence  impossible. 

We  see,  therefore,  that  the  mutual  hostility  of  employers  and 
employed  is  the  prime  obstacle  to  the  three  essentials  of  indus- 
trial prosperity — increased  output,  increased  saving,  increased 
confidence.  It  is  only  from  the  removal  of  this  obstacle  that 
any  one  of  the  three  great  parties  to  the  industrial  process  can 
look  for  a  permanent  increase  of  earnings. 

We  may  therefore  lay  down  these  four  broad  principles  as 
those  which  must  guide  our  attempt  to  solve  the  industrial  prob- 
lem. 

(o)  The  first  necessity  of  the  industrial  situation  is  greater 
efficiency  of  production.  In  order  to  meet  the  difficul- 
ties created  by  the  war,  to  make  good  the  losses  of  cap- 
ital, and  to  raise  the  standard  of  living  amongst  the 
mass  of  our  people,  we  must  endeavour  to  increase 
both  the  volume  and  the  quality  of  output. 
(b)  In  order  that  this  result  may  be  obtained  without  detri- 
ment to  the  social  welfare  of  the  community,  it  must 
be  sought  for  rather  in  improved  organisation  and  the 
elimination  of  waste  and  friction  than  in  adding  to 
the  strain  on  the  workers,  and  must  be  accompanied 
by  a  change  of  attitude  and  spirit  which  will  give  to 
industry  a  worthier  and  more  clearly  recognised  place 
in  our  national  life. 


14  SELECTED   ARTICLES 

(c)  This  can  only  be  accomplished  if  the  sectional  treatment 
of  industrial  questions  is  replaced  by  the  active  co-oper- 
ation of  labour,  management,  and  capital  to  raise  the 
general  level  of  productive  capacity,  to  maintain  a  high 
standard  of  workmanship,  and  to  improve  working 
conditions. 

(d)  It  is  essential  to  the  securing  of  such  co-operation  that 

labour,  as  a  party  to  Industry,  should  have  a  voice  in 
matters   directly  concerning   its   special   interests,    such 
as  rates  of  pay  and  conditions  of  employment.     It  is 
necessary  to  create  adequate  machinery  both  for  secur- 
ing united  action  in  the  pursuit  of  common  ends  and 
for  the  equitable  adjustment  of   points   which   involve 
competing    interests.      This    machinery    must    be    suffi- 
ciently powerful  to  enable  both  sides  to  accept  its  de- 
cisions with  confidence  that  any  agreement  arrived  at 
will  be  generally  observed. 
There  are  many  to  whom  these  principles  will  not  seem  to 
go  far  enough.     They  are  convinced  that  the  only  solution  lies 
in  a  complete  reconstruction  of  society — the  abolition  of  private 
ownership   of   land   and   capital,   the   establishment   of   state  or 
guild  socialism,  the  re-integration  of  industry,  the  return  to  the 
land,  the  break-up  of  the  existing  trade  unions.     Accordingly 
they  reject  the  notion  of  co-operation  between  employers  and 
employed  as  involving  an  abandonment  of  the  first  essentials  of 
reform.  If  we  were  discussing  the  abstract  ideal  of  Society,  it 
would  be  necessary  to  meet  their  criticisms  by  discussing  each 
of  their  proposals  on  its  merits.     But  the   present  issue   is   a 
narrower  one.     We  have  to  deal  with  a  definite  and  immediate 
danger — the  prospect  of  an  industrial  crisis  involving  loss  and 
hardship  to  all  parties  to  Industry.     It  is  obvious  that  no  mea- 
sure involving  a  radical  reconstruction  of  the  social  system  has 
any  chance  of  adoption  in  time  to  avert  this  evil.    On  the  other 
hand,  the  prospect  of  any  specific  programme  emerging  from  a 
period  of  internal   conflict   is   small.     The   results   of   social  or 
political  upheavals  have  seldom  been  those  anticipated  by  their 
promoters.     The   men   whose   ideas   gave   birth   to   the   French 
Revolution  did  not  foresee  the  Terror  or  the  Empire.    The  Long 
Parliament    foresaw   neither   the   reign   of   the   Major-Generals 
nor  the    Restoration,      If  we    are  to    find   a  way    out   of  the 


PROBLEMS   OF   LABOR  J5 

threatened  difficulties,  we  must  do  so  by  making  the  best  use  of 
the  materials  at  hand,  accepting  the  conditions  under  which  we 
work  and  seeking  to  unite  all  classes  in  the  pursuit  of  interests 
which  are  common  to  all.  Whatever  may  be  the  ultimate  direc- 
tion of  industrial  progress,  an  advance  is  more  likely  to  be 
founded  on  a  first  right  step  than  to  come  through  the  chaos  of 
industrial  warfare  and  class-hatred. 

The  difficulties  of  devising  any  scheme  of  co-operation 
which  shall  be  acceptable  alike  to  employers  and  employed  are 
great  enough.  It  demands  from  both  a  clear  understanding  of 
their  respective  parts  in  the  process  of  production,  a  measure 
of  sympathy  with  the  point  of  view  of  the  other  parties  to  that 
process  and  a  just  perception  of  the  respective  weight  to  be 
attached  to  conflicting  and  to  common  interests.  It  calls  for  a 
certain  daring  in  experiment  and  for  a  willingness  to  -make 
sacrifices,  if  needs  be,  for  the  common  good.  It  requires  both 
parties  to  abandon  recrimination  as  to  the  mistakes  of  the  past 
and  to  approach  each  other  in  a  new  spirit. 

These  are  great  demands ;  but  the  emergency  and  the  oppor- 
tunity are  also  great.  Whatever  we  may  do,  we  may  be  sure 
that  things  will  not  continue  to  move  quietly  in  the  familiar 
grooves.  The  whole  world  alike  of  conditions  and  ideas  has 
been  violently  shaken  and  a  ferment  has  been  set  up  out  of 
which  may  come  either  good  or  evil,  but  in  no  event  a  re- 
version to  the  old  order.  We  cannot  alter  the  facts  by  ignoring 
them.  Our  only  choice  lies  between  the  risks  involved  in 
abandoning  ourselves  passively  to  the  forces  of  change  and 
the  effort  required  to  harness  them  for  our  own  ends. 

To  avoid  chaos  is  much ;  of  itself  it  would  be  worth  no  small 
sacrifice  and  effort  on  the  part  of  all.  The  gain  which  might 
accrue  to  any  class  from  conflict  is  shadowy  and  uncertain ;  the 
loss  and  suffering  to  every  class  alike  are  certain  and  heavy. 

But  to  avoid  danger  is  not  all.  It  seems  probable  that  we 
stand  to-day  at  one  of  those  definite  turning  points  in  human 
history  where  a  generation  of  men  has  it  in  its  power,  by  the 
exercise  of  faith  and  wisdom,  by  facing  the  problems  of  the 
moment  without  passion  and  without  shrinking,  to  determine 
the  course  of  the  future  for  many  years.  If  we  can  rise  to  the 
height  of  our  opportunity  we  may  hope  not  merely  to  pass 
safely  through  the  immediate  crisis,  but  to  raise  the  whole  tone 
and  level  of  national  and  individual  life.  ■  '. 


i6  SELECTED   ARTICLES 

Whatever  action  is  taken  must  be  the  result  of  frank  and 
full  discussion  between  representatives  of  all  parties  to  the  ques- 
tion. Any  attempt  to  enforce  upon  one  party  a  scheme  framed 
wholly  by  another  would  defeat  its  own  object  and  precipitate 
the  crisis.  It  will  not  do  to  look  to  the  Government  for  the 
initiative.  Whatever  part  the  State  may  play  in  the  future  of  in- 
dustry, it  cannot  move  in  advance  of  the  general  level  of  opin- 
ion among  those  concerned.  Most  of  the  difficulties  which  have 
been  analysed  in  this  memorandum  apply  with  equal  force  to 
state  controlled  industries,  and  while  the  solution  may  involve 
legislative  sanction  or  state  action,  the  problem  itself  can  be 
settled   only  by  agreement   between  those   chiefly   concerned. 

The  first  step  towards  agreement  is  to  define  the  functions 
of  the  three  parties  to  production. 

Capital  is  necessary  to  a  business  for  the  erection  of  plant, 
the  purchase  of  raw  material,  and  working  expenses.  In  order 
that  capital  should  be  used  to  the  best  advantage  for  the  pur- 
poses of  industry,  it  is  necessary  that  investors  should  display 
sound  judgment  as  to  the  prospects  and  requirements  of  par- 
ticular enterprises,  exercising  caution  or  daring  as  occasion 
demands. 

Management  is  concerned  with  the  disposition  of  the  capital 
provided,  the  erection  and  employment  of  machinery  and  plant, 
the  general  organisation  of  the  business,  the  placing  and  accept- 
ance of  contracts,  the  purchase  of  the  raw  material,  and  the" 
sale  of  the  finished  product.  The  performance  of  these  func- 
tions requires  not  merely  a  knowledge  of  the  particular  busi- 
ness concerned  but  of  all  which  are  in  any  way  connected  with 
it,  a  careful  study  of  markets,  of  methods  of  distribution,  and 
of  financial  conditions. 

Labour  undertakes  the  conversion  of  the  raw  material  into 
the  finished  product,  by  aid  of  the  plant  and  machinery  pro- 
vided. While  the  first  requisite  in  the  workman  is  a  thorough 
understanding  of  his  own  job,  the  maximum  efficiency  can  only 
be  attained  if  he  has  a  clear  conception  of  the  part  played  by 
his  own  work  in  the  whole  process  of  production. 

These  definitions  are  framed  with  a  view  to  a  manufacturing 
business,  but  they  can  be  adapted,  by  changes  which  will  readily 
suggest  themselves  and  are  not  vital,  to  a  distributive  industry. 

It  is  obvious  that  the  functions  of  capital,  management,  and 
labour  6verlap.    In  many  cases  the  man  who  provides  the  funds 


PROBLEMS   OF   LABOR  17 

of  a  business  also  directs  its  working.  In  such  cases  he  per- 
forms both  the  waiting  and  risk-taking  functions  of  capital 
and  management's  function  of  expert  control.  It  is  logical  to 
regard  his  profits  as  consisting  partly  of  interest  on  the  capital 
provided  and  partly  of  remuneration  for  his  services  as  man- 
ager. Again,  a  foreman  or  a  ganger  combines  to  some  extent 
the  functions  of  labo»ir  and  management;  and  in  general,  the 
spheres  of  management  and  labour  activity  are  too  closely  con- 
nected for  any  clear  line  of  demarcation  to  be  drawn  between 
them.  Capital  itself  represents  the  result  of  past  services  per- 
formed by  all  three  parties. 

This  inter-relation  of  functions  constitutes  a  real  partnership ' 
between  the  persons  concerned  in  any  business,  whether  as  in- 
vestors, managers,  or  workmen,  or  in  any  two  or  all  of  these 
capacities.  At  present  the  relation  between  them  is  unrecognised 
or  only  partly  understood,  and  the  result  is  to  produce  hostility 
instead  of  co-operation  between  the  partners.  The  attention  of 
all  is  apt  to  be  concentrated  on  the  points  in  which  their  interests 
conflict  to  the  exclusion  of  those  in  which  they  are  common. 

This  failure  to  realise  the  possibilities  of  co-operation  springs 
largely  from  neglect  of  a  fundamental  principle.  The  first 
article  of  partnership  is  equality  of  knowledge.  At  present  the 
workers  have  little  knowledge  of  the  capital  risks,  working  ex- 
penses, establishment  and  depreciation  charges  of  a  business,  or 
of  the  relation  between  their  particular  job  and  the  general  pro- 
cess of  production.  On  the  other  hand,  employers  have,  as  a 
rule,  a  very  imperfect  understanding  of  the  workers'  point  of 
view,  the  degree  in  which  they  are  affected  by  economic  and 
social  considerations  respectively,  and  the  effect  of  particular 
processes  and  methods  of  working  upon  their  physical  and  moral 
life.  From  this  mutual  ignorance  arise  innumerable  misunder- 
standings with  regard  to  rates  of  pay  and  conditions  of  labour 
which  are  capable  onh-  of  arbitrary'  solutions,  because  neither 
side  understands  the  standpoint  of  the  other.  It  is  probable 
that  a  large  percentage  of  the  disputes  arising  over  rates  of  pay, 
the  introduction  of  labour-saving  machinery,  hours  of  work,  the 
demarcation  of  tasks,  trade  union  restrictions,  could  be  avoided 
or  compromised,   if  employers   and   employed    really   understood 

'  The  word  partnership  is  here  used  in  its  widest  sense  and  does  not 
involve  the  acceptance  of  what  are  generally  known  as  copartnership 
schemes. 


i8  SELECTED   ARTICLES 

the  reasons  for  the  attitude  of  the  other  party.  In  default  of 
such  understanding  the  dispute  takes  on  the  character  of  a  trial 
of  strength,  in  which  each  side  is  compelled,  for  the  sake  of 
principle  and  prestige,  to  put  forth  efforts  disproportionate 
to  the  actual  point  at  issue. 

We  have  said  that  the  chief  obstacle  to  co-operation  is  the 
question  of  status.  The  development  of  .modern  industry  has 
turned  the  operative  into  a  mere  cog  in  the  industrial  machine. 
The  average  working  man  has  no  say  in  the  management  of 
the  business  and  very  little  as  to  the  conditions  of  his  employ- 
ment; he  has  no  interest  in  the  success  of  the  firm,  except  that 
it  should  not  collapse  altogether;  and  the  tendency  has  been 
more  and  more  to  reduce  his  work  to  a  mechanical  routine. 
The  term  "wage-slavery,"  as  we  have  seen,  embodies  the  re- 
volt of  the  worker  not  only  against  an  unequal  bargain  but 
against  a  system  which  gives  him  neither  interest,  nor  pride, 
nor  a  sense  of  responsibility  in  his  work.  To  a  large  proportion 
of  those  engaged  in  industry  their  work  has  become  something 
external  to  their  personal  life,  a  disagreeable  necessity,  afford- 
ing no  opportunity  for  self-expression,  the  joy  of  creation,  or 
the  realisation  of  healthy  ambitions.  The  result  has  been  a 
serious  impoverishment  and  enfeeblement  of  life  and  character 
and  a  permanent  obstacle  to  industrial  development.  It  is  im- 
possible for  men  in  this  position  to  take  long  views,  or  to  con- 
sider innovations  from  the  standpoint  of  industry  as  a  whole. 
The  opposition  to  new  methods  of  working,  labour-saving  ma- 
chinery, dilution  of  labour,  scientific  management,  is  only  in  part 
the  result  of  specific  and  reasoned  objections.  It  springs  still 
more  largely  from  the  fact  that  these  schemes  are  imposed  from 
above  and  are  presumed  to  be  framed  solely  in  the  interest  of 
the  employers.  The  opposition  to  them  is,  in  fact,  a  revolt 
against  dictation.  On  the  other  hand,  the  uncompromising  at- 
titude of  employers  does  not,  generally  speaking,  arise  from  a 
tyrannical  spirit  or  a  mere  desire  for  increased  profits,  but 
from  impatience  with  the  men's  separatist  attitude  and  their 
inability  to  realise  the  common  dependence  of  employers  and 
employed  upon  the  produce  of  their  joint  exertions. 

The  same  difficulty  arises  in  the  case  of  distribution  of 
earnings.  The  worker  feels  that  his  labour  is  treated  as  a  mere 
commodity,  the  market  value  of  which  may  be  forced  down  by 
the    employer,    irrespective    of   any   consideration    of    a    decent 


PROBLEMS   OF   LABOR  19 

standard  of  life  for  the  employed,  and  that  he  receives  the  re- 
ward of  his  toil,  not  as  a  matter  of  right  or  as  the  equitable 
division  of  the  proceeds  of  joint  effort,  but  as  a  dole  fixed  by 
the  arbitrary  will  of  the  employer  or  as  a  concession  extorted 
by  force.  The  employer  feels  that  each  demand  made  upon  him 
represents  a  raid  upon  his  profits  limited  solely  by  the  power  of 
the  workers'  organisations  and  unaffected  by  any  consideration 
of  the  working  expenses  of  the  business,  provision  for  depre- 
ciation or  dilapidations,  or  the  building  up  of  a  reserve  against 
future  depression.  In  the  confusion  of  thought  arising  from 
imperfect  understanding,  there  is  a  tendency  to  regard  the 
whole  problem  as  centreing  round  the  concrete  question  of  dis- 
tribution, which  becomes  a  symbol  of  the  general  opposition  of 
interests.  The  consequence  is  that  disputes  as  to  wages  are 
often  fought  on  either  side  with  a  bitterness  and  obstinacy 
altogether  out  of  proportion  to  the  amounts  involved.  In  order 
to  arrive  at  a  clearer  conception,  it  is  essential  to  disentangle 
as  far  as  possible  the  economic  and  non-economic  factors.  If 
the  question  of  status  can  be  settled,  the  main  obstacle  to  an 
agreement  as  to  distribution  will  have  been  removed. 

The  problem  is,  therefore,  to  settle  this  question  of  status 
in  some  way  which  shall  give  the  workman  the  sense  of  self- 
respect  and  responsibility  which  he  desires,  \vithout  interfering 
unduly  with  the  employer's  exercise  of  the  necessary  functions 
of  management.  The  trade  union  regulations,  which  have  been 
so  largely  suspended  by  agreement  for  the  period  of  the  war, 
were  mostly  directed  towards  this  end — the  assumption  by  la- 
bour of  some  measure  of  control  over  the  conditions  under 
which  it  works.  They  refer  to  wages,  hours  of  labour,  over- 
time and  Sunday  work,  apprenticeship  and  the  method  of  entry 
into  particular  occupations,  the  kind  of  work  to  be  performed 
by  different  classes  of  workers,  the  methods  of  negotiation  be- 
tween employers  and  employed,  and  similar  questions.  In  other 
words,  they  represent  an  attempt  to  substitute  for  the  autocratic 
control  of  the  employer  over  the  working  lives  of  his  employees 
a  greater  and  greater  degree  of  self-direction  by  the  organised 
workers  themselves,  acting  through  their  accredited  representa- 
tives. 

As  a  natural  result  of  the  assumed  conflict  between  the 
fundamental  interests  of  employers  and  employed,  the  action  of 
the   trade  unions  took  the   form,  in  appearance  at  least,  of  an 


20  SELECTED   ARTICLES 

attack  upon  the  profits  of  the  employers  and  their  right  to  con- 
trol the  conduct  of  their  business.  It  was  largely  as  a  defence 
against  the  unions  that  the  great  employers'  associations  came 
into  being.  After  making  all  allowance  for  the  occasional  in- 
subordination of  trade  union  members  and  the  lack  of  support 
given  in  some  quarters  to  the  employers'  federations,  the  eflect 
of  these  parallel  organisations  has  been  beneficial  to  both  sides. 
Hitherto,  however,  the  action  of  both  groups  has  been  almost 
entirely  negative.  They  have  placed  restraints  both  upon 
tyranny  and  upon  anarchy;  they  have  succeeded  in  cc^mpromis- 
ing  many  disputes  and  in  restricting  the  occasions  of  open  con- 
flict ;  but  they  have  done  little  or  nothing  to  remove  the  con- 
tinual undercurrent  of  latent  hostility  and  divergence  of  effort 
which  has  hampered  industrial  development  far  more  than  the 
direct  effect  of  strikes  and  lock-outs.  They  have  protected  the 
special  interests  which  they  respectively  represent ;  but  they 
have  not  risen  to  the  conception  of  combined  action  in  pursuit 
of  their  common  interests.  Valuable  as  their  work  has  been, 
it  can  hardly  be  regarded  as  an  adequate  return  for  the  ability, 
energy,  and  power  of  organisation  displayed  on  both  sides. 

The  explanation  of  the  comparative  failure  of  the  em- 
ployers* associations  and  trade  unions  on  the  constructive 
side  of  the  industrial  problem  is  to  be  found  in  their  strictly 
sectional  and  defensive  origin  and  outlook.  Regarding 
themselves  as  entrusted  with  the  interests  of  one  party  to 
industry  and  not  of  industry  itself,  they  have  paid  no  atten- 
tion to  the  problems  and  difficulties  of  the  other  side,  and 
they  have  come  together  only  when  one  had  a  demand  to 
make  of  the  other  or  when  a  conflict  was  imminent.  Thus 
they  have  always  met  in  an  atmosphere  of  antagonism,  and 
their  negotiations  have  been  carried  on  as  between  two  hos- 
tile bodies.  Exchange  of  views  has  come  at  too  late  a  stage 
in  the  proceedings,  when  a  stand  has  already  been  taken  on 
both  sides  and  prestige  or  prejudice  forms  an  obstacle  to 
concessions.  What  is  still  more  important,  their  discussions 
have  been  confined  to  specific  points  of  dispute  and  have 
not  embraced  the  consideration  of  constructive  measures  for 
the  imi)rovement  of  industrial  conditions  and  the  increase 
of  efficiency.  Yet  the  possibilities  of  combined  action  which 
lie  in  these  two  great  groups  of  highly  organised  and  power- 


PROBLEMS   OF    LABOR  21 

£ul  bodies  might  transform  the  whole  face  of  industrial  life. 
Their  united  knowledge  of  both  sides  of  the  industrial  pro- 
cess should  enable  them  to  throw  light  on  every  phase  of  its 
successive  developments.  Their  united  strength  would 
render  them,  in  combination,  practically  irrestible.  But  to 
secure  the  realisation  of  these  possibilities  the  co-operation 
between  the  two  groups  must  be  continous  and  constructive, 
and  must  be  based  upon  a  recognition  of  the  common  in- 
terests of  employers  and  employed,  both  as  parties  to  in- 
dustry and  members  of  the  community.  Employers  must 
realise  that  both  their  own  interests  and  the  obligations  of 
citizenship  impose  upon  them  the  necessity  of  a  sympathetic 
understanding  of  the  lives  and  standpoint  of  those  with 
whom  they  work  and  a  willingness  to  co-operate,  without 
dictation  or  patronage,  in  every  endeavour  to  improve  their 
material  or  social  conditions.  Labour  must  realise  its  direct 
interest  in  the  improvement  of  industrial  processes,  the 
organisation  of  industry,  the  standard  and  quantity  of  pro- 
duction, and  the  elimination  of  waste  in  material  or  eflfort. 
Both  the  employers'  associations  and  trade  unions  must 
learn  to  regard  themselves  as  joint  trustees  of  one  of  the 
most  important  elements  of  the  national  life. 

The  machinery  necessary  for  such  co-operation  will  re- 
quire to  be  created.  The  existing  conciliation  boards,  or 
industrial  boards  on  the  Australian  model,  while  they  per- 
form many  useful  functions,  will  not  serve  this  purpose. 
These  Boards  are,  in  fact,  independent  courts  sitting  to 
adjudicate  upon  claims  in  respect  of  which  the  parties  are 
unable  to  agree.  Such  a  method  of  adjudication  is  in  many 
ways  preferable  to  the  alternative  of  leaving  questions  to  be 
settled  by  conflict,  as  the  result  of  a  strike  or  lock-out. 
They  enable  employers  and  employed  to  contract  on  moral 
equal  terms.  They  result  also  in  the  production  of  detailed 
evidence  whereby  each  side  might,  if  it  had  the  inclination, 
understand  the  case  of  the  other.  But  here,  too,  the  ex- 
change of  views  comes  too  late  and  the  parties  meet  not  to 
co-operate  but  to  oppose  each  other.  Moreover,  they  are 
concerned  solely  with  the  settlement  of  specific  disputes,  and 
while  they  may  continue  to  do  useful  work  in  this  connec- 
tion, they  cannot  provide  the  opportunity  for  that  continu- 


22  SELECTED   ARTICLES 

ous  and  constructive  co-operation  of  management  and  la- 
bour which  is  essential  to  any  satisfactory  solution  of  the 
industrial  problem. 

Something  much  more  comprehensive  is  required,  and 
the  task  of  providing  it  will  need  very  careful  attention  from 
those  concerned.  It  is  unlikely  that  any  one  scheme  could 
be  devised  which  would  be  applicable  to  all  industries  or  in 
all  localities.  The  utmost  elasticity,  whether  in  present  ap- 
plication or  in  future  development,  is  necessary  to  any  sys- 
tem of  industrial  organisation,  for  industry  itself  develops 
and  modifies  day  by  day.  But  the  general  lines  upon  which 
development  is  possible  can  be  deduced  from  the  foregoing 
analysis  of  the  difficulties  to  be  overcome. 

In  its  simplest  form,  the  new  machinery  would  consist 
of  joint  committees,  representing  both  the  management  and 
the  works  staff.  This  method  would  lend  itself  readily  to 
experiment  by  individual  firms  and  could  be  applied  even  in 
the  unorganised  trades  where  no  strong  trade  unions  or 
federations  of  employers  exist.  At  the  meetings  of  such 
committees  any  questions  affecting  working  methods  and 
conditions  could  be  brought  up  for  discussion  by  either  side. 
The  representatives  of  management  would  be  required  to 
explain  the  nature  and  extent  of  any  proposed  innovation 
designed  to  increase  output  or  economise  effort — the  intro- 
duction of  new  automatic  machinery,  time  and  motion  study, 
standardisation  of  tools,  analysis  of  fatigue,  elimination  of 
waste — and  its  effect  upon  the  earnings  of  the  firm  and  of 
the  individual  worker.  This  explanation  should  be  as  clear 
and  full  as  possible,  with  the  object  of  giving  each  worker 
an  interest  and  sense  of  responsibility  in  his  work,  by  mak- 
ing clear  to  him,  through  his  representatives,  the  reason  for 
the  methods  to  be  adopted  and  the  relation  of  his  job  to 
the  whole  process  of  production.  The  proposals  having 
been  explained,  the  workers'  representatives  would  consider 
them  from  the  point  of  view  of  the  interests  of  the  men  em- 
ployed, the  relation  between  the  different  classes  of  labour, 
the  strain  on  the  workers,  the  amount  of  interest  and  intelli- 
gence put  into  their  work.  If  necessary,  they  would  put 
forward  modifications  or  safeguards  for  the  protection  of 
these  interests.  Where  the  result  was  to  show  a  real  diver- 
gence of  opinion  or  of  interest,  it  would  be  freely  discussed. 


PROBLEMS   OF   LABOR  23 

with  a  view  to  finding  a  way  round  and  adjusting  the  bal- 
ance between  common  and  competing  interests.  In  like 
manner,  proposals  for  alterations  in  the  hours  or  conditions 
of  labour,  in  the  interests  of  health  or  social  welfare  of 
the  workers,  would  be  put  forward  by  the  workers'  repre- 
sentatives and  discussed  in  the  light  of  any  objections  on 
the  score  of  expense  or  difficulties  of  working  urged  by  the 
representatives  of  management.  While  the  representatives 
of  management  would  naturally  be  concerned  mainly  with 
the  efficiency  of  the  business  and  those  of  labour  with  the 
immediate  interests  of  the  workers,  it  is  very  desirable  that 
neither  should  confine  their  attention  to  their  own  side  of 
the  business.  A  wise  employer  will  always  have  the  in- 
terests of  his  staff  at  heart,  and  workmen  who  feel  them- 
selves to  have  a  recognised  interest  in  the  business  will 
have  many  suggestions  to  put  forward  for  promoting  its 
efficiency. 

In  the  staple  trades,  the  method  of  works  committees 
would  require  to  be  replaced,  or  supplemented,  by  joint 
boards  composed  of  representatives  of  the  employers'  asso- 
ciations and  the  trade  unions.  Having  regard  to  the  differ- 
entiation of  functions  between  management  and  labour  and 
the  large  number  of  problems  affecting  one  or  both  parties, 
which  arise  in  a  big  industry,  tw'O  co-equal  boards  might  be 
created  in  each  industry,  one  representing  management  and 
the  other  labour,  with  a  supreme  board  of  control  co-ordi- 
nating the  work  of  both.  The  functions  of  the  management 
board  would  cover  the  "business"  side  of  the  industry,  those 
of  the  labour  board  would  relate  to  conditions  and  hours  of 
labour,  the  demarcation  of  tasks  and  everything  that 
touches  most  nearly  the  life  of  the  worker.  Representatives 
of  these  boards,  meeting  on  the  supreme  board  of  control, 
would  deal  jointly  with  all  matters  by  which  the  interests 
of  both  parties  were  affected.  Such  questions  as  the  dilu- 
tion of  labour,  which  is  becoming  increasingly  important, 
yet  which  cannot  be  dealt  with  satisfactorily  so  long  as  it 
is  approached  from  one  side  only,  would  be  discussed  by 
the  joint  board  of  control,  both  from  the  point  of  view  of 
efficiency  in  production  and  from  that  of  the  interests  of 
the  workers  and  the  position  of  the  trade  unions.  In  this 
manner  it  should  be  possible  to  construct  and  give  effect  to 


24  SELECTED   ARTICLES 

a  definite  policy  and  programme  for  each  great  industry  as 
a  whole,  representing  a  reconciliation  between  the  common 
and  competing  interests  of  employers  and  employed,  and 
based  both  upon  the  desire  to  obtain  the  maximum  of  effi- 
ciency and  the  desire  to  obtain  the  best  possible  conditions 
for  the  workers. 

In  order  to  avoid  the  evils  of  inelasticity  and  over-cen- 
tralisation, and  to  make  due  provision  for  the  varying  con- 
ditions of  diflferent  localities  and  firms,  it  might  he  ad- 
visable to  combine  the  creation  of  these  central  boards  with 
an  organisation  of  district  and  works  committees,  charged 
with  the  special  care  of  local  and  individual  interests  and 
problems.  The  representation  of  such  committees  on  the 
central  boards,  and  the  delegation  to  them  of  local  ques- 
tions, would  constitute  a  protection  against  the  injustice 
which  might  otherwise  be  done  by  an  attempt  to  equalise 
rates  of  pay  in  areas  which  differ  widely  as  to  the  cost  of 
housing  and  food,  or  in  which  the  conditions  of  production 
and  transport  produce  important  variations  in  working  ex- 
penses. They  would  also  serve  as  a  protection  to  estab- 
lished workshop  and  local  craft  traditions  against  the  dead- 
ening tendency  to  a  mechanical  uniformity. 

In  its  most  ambitious  form,  the  Supreme  Board  of  Con- 
trol would  resolve  itself  into  a  national  industrial  council 
for  each  of  the  staple  industries  or  groups  of  allied  indus- 
tries. The  members  would  be  elected  by  ballot,  each  elec- 
toral unit,  or  pair  of  parallel  units,  returning  one  represen- 
tative of  management  and  one  of  labour.  In  many  indus- 
tries it  would  be  desirable  to  find  a  place  on  the  Council  for 
representatives  of  the  applied  arts,  both  with  a  view  to  rais- 
ing the  standard  of  design  and  workmanship,  and  with  the 
object  of  encouraging  the  human  and  creative  interest  in 
production.  A  speaker  of  broad  sympathies  and  experience, 
capable  of  directing  and  focussing  the  discussions  upon  the 
practical  problems  to  be  dealt  with,  would  be  chosen  by 
mutual  consent,  but  would  have  no  casting  vote,  his  ca- 
pacity being  purely  advisory.  Such  industrial  councils 
would  in  no  sense  supersede  the  existing  employers'  asso- 
ciations and  trade  unions,  many  sides  of  whose  present 
activities  would  be  unaffected  by  the  creation  of  the  new 
bodies.     Matters  connected  with  the   sources  and  supply  of 


PROBLEMS   OF    LABOR  25 

raw  material  and  the  cultivation  of  markets  for  the  disposal 
of  the  finished  products  would  remain  exclusively  the  con- 
cern of  purely  commercial  federations  of  manufacturers, 
acting  in  conjunction  with  the  state.  The  benefit  side  of 
trade  unions  and  many  phases  of  the  internal  organisation 
of  labour  by  them  would  be  similarly  unaffected.  In  other 
matters  the  connection  between  the  old  and  the  new  bodies 
would  be  close,  without  any  loss  of  identity.  The  unions 
and  the  employers'  associations  would  send  their  delegates 
to  the  industrial  councils  charged  with  the  defence  of  the 
special  interests  represented  by  them  and  equipped  with 
special  knowledge  of  their  particular  problems.  The  gen- 
eral policy  outlined  by  the  industrial  parliaments  would  be 
carried  out  in  detail  largely  through  the  older  organisations/ 
The  field  of  action  open  to  the  industrial  councils  would 
he  very  great.  It  would  extend,  for  instance,  to  (a)  the 
suggestion  and  consideration  of  improved  methods  and 
organisation;  (/')  the  maintenance  of  works  discipline  and 
output;  (c)  the  maintenance  of  a  Iiigh  standard  of  design 
and  workmanship;  (d)  the  education  and  training  of  appren- 
tices, and  the  conditions  of  entry  into  the  industrj'  con 
cerned;  (c)  the  demarcation  of  tasks;  (/)  the  prevention  of 
unemployment,  the  development  of  security  of  tenure  in  the 
trade  and  the  decasualisation  of  labour;  (g)  questions  of 
wages  and  piece  rates;  (h)  prosecution  of  research  and  ex- 
periment, and  (0  the  improvement  of  the  public  status  of 
the  industry.  Where  the  council  represented  a  group  of 
allied  trades,  it  would  naturally  concern  itself  with  the  co- 
ordination of  their  work  and  the  adjustment  of  their  re- 
spective interests.  In  addition  to  the  promotion  of  internal 
prosperity,  the  councils  vv^ould  be  able  to  give  public  utter- 
ance to  the  views  and  needs  of  each  industry  in  its  relation 
to  the  whole  national  life.  They  would  take  account  not 
only  of  economic  but  of  moral  and  aesthetic  values.  Their 
object  would  be  not  merely  to  increase  the  productive  effi- 
ciency of  the  industry  and  to  reconcile  the  competing  in- 
terests of  those  engaged  in  it,  but  to  emphasise  the  worth 
and  dignity  of  industrial  life  and  to  enlarge  the  scope  oflfered 

1  It  should  be  clearly  understood  that  the  right  to  strike  in  default  of 
agreement  would  remain  unaffected.  This  point  was  made  quite  clear  in 
the   Whitley   Reports. 


26  SELECTED   ARTICLES 

by  it  to  the  energies  and  ambitions  of  those  concerned.  It 
would  be  part  of  their  task  to  emphasise  the  close  connec- 
tion between  industrial  questions  and  those  relating  to  edu- 
cation and  social  conditions.  It  might  even  be  advisable  to 
empower  the  industrial  councils  to  apply  for  board  of  trade 
orders  giving  legal  sanction  to  their  decisions — but  this 
would  necessitate  careful  watching,  and  the  provision  of 
adequate  safeguards,  especially  in  the  interests  of  consum- 
ers. 

There  is,  of  course,  a  tendency  in  all  great  associations 
of  industrial  units  to  develop  the  danger  of  tyranny,  which 
seems  almost  inseparable  from  a  close  corporation.  If, 
however,  it  is  found  that  the  requirements  of  the  time  call 
for  the  creation  of  such  organisations,  it  would  be  well  to 
face  this  danger  without  flinching.  The  advantages  to  be 
obtained  are  enormous,  and  with  the  help  of  the  legislature 
and  the  courts  the  dangers  can  be  met. 

Whatever  scheme  is  adopted,  the  essential  thing  is  that 
it  shall  give  expression  to  a  real  desire  for  co-operation  be- 
tween employers  and  employed.  In  the  unorganised  trades, 
works  committees  on  the  plan  already  suggested  may  be 
sufificient  for  present  needs.  The  probability  is  that,  with 
increasing  prosperity  and  better  understanding,  the  desire 
for  organisation  will  grow,  and  the  tendency  will  be  to  ex- 
tend the  scope  both  of  employers'  and  labour  organisations 
and  to  increase  their  effectiveness,  so  as  to  give  the  employ- 
ers' associations  greater  power  to  control  the  action  of  in- 
dividual firms  and  to  enable  the  trade  unions  to  make 
agreements  with  a  greater  certainty  of  their  being  carried 
out.  It  is  evidently  desirable  that  the  organisation  of  em- 
ployers and  of  labour  should  proceed  pari  passu,  with  full 
mutual  recognition,  so  that  individual  or  small  groups  on 
one  side  should  not  find  themselves  confronted  by  powerful 
organisations  on  the  other.  When  once  a  policy  of  co-oper- 
ation has  been  introduced,  its  future  development  and  exten- 
sion may  safely  be  left  to  time  and  experience.  An  attempt 
to  lay  down  any  definite  and  rigid  scheme  at  the  start  would 
probably  defeat  its  own  object.  The  whole  success  of  the 
policy  depends  upon  the  elasticity  with  which  it  can  be 
adapted  to  practical  needs  and  opportunities  as  they  reveal 
themselves.     It  is  obvious  that,  even  in  unorganised  trades, 


PROBLEMS   OF   LABOR  27 

it  might  be  applied  to  many  questions  of  works  economy, 
with  the  result  of  stimulating  care  and  efficiency  on  the  part 
of  the  workers,  and  giving  management  a  better  understand- 
ing of  their  point  of  view,  to  the  advantage  of  both.  In  the 
engagement  of  men  and  their  allocation  to  different  depart- 
ments and  jobs,  it  should  be  possible  to  take  advantage  of 
the  special  knowledge  of  both  sides,  by  consultation  be- 
tween the  managers  and  the  representatives  of  the  works 
staff  as  to  the  numbers  and  qualities  of  the  men  required. 
In  some  cases  it  might  even  be  possible  to  appoint  a  per- 
manent joint  committee  to  deal  with  the  question  of  the 
supply  of  labour,  and  the  requirements  of  the  work  in  hand. 


LABOR'S    BILL   OF   RIGHTS' 

The  "Bill  of  Rights,"  formulated  and  adopted  on  December 
13  by  the  national  labor  conference  called  by  Samuel  Gompers, 
president  of  the  American  Federation  of  Labor,  and  attended 
by  representatives  of  119  international  unions,  including  the 
"Big  Four"  railroad  brotherhoods,  contains  the  following  decla- 
rations of  principles  and  purposes,  upon  which  more  than 
5,000,000  members  of  the  trades  union  movement  in  the  United 
States  are  to  stand : 

We  speak  in  the  name  of  millions  who  work— those  who 
make  and  use  tools — those  who  furnish  the  human  power  neces- 
sary for  commerce  and  industry;  we  speak  as  part  of  the  nation 
and  of  those  things  of  which  we  have  special  knowledge.  Our 
welfare  and  interest  are  inseparably  bound  up  with  the  well- 
being  of  the  nation.  We  are  an  integral  part  of  the  American 
people,  and  we  are  organized  to  work  out  the  welfare  of  all. 

The  urgent  problem  that  Stirely  troubles  our  nation  and 
vitally  affects  us  as  workers  makes  necessary  this  special  consul- 
ation. 

The  great  victories  of  human  freedom  must  not  have  been 
won  in  vain.  They  must  serve  as  the  instruments  and  the  in- 
spiration for  a  greater  and  nobler  freedom  for  all  mankind. 
.  Autocratic,  political  and  corporate  industrial  and  financial  in- 
fluences in  our  country  have  sought  and  are  seeking  to  infringe 
upon  and  limit  the  fundamental  rights  of  the  wage-earners 
guaranteed  by  the  constitution  of  the  United  States. 


28  SELECTED   ARTICLES 

Powerful  forces  are  seeking  more  and  more  aggressively  to 
deny  to  wage-earners  their  right  to  cease  work.  W'c  denounce 
these  efforts  as  vicious  and  destructive  of  the  most  precious 
liberties,  of  our  people.  So  long  as  it  is  necessary  to  exercise 
the  right  to  cease  work — strike — as  a  final  means  of  enforcing 
justice  from  an  autocratic  control  of  industry,  so  long  must  the 
workers  remain  in  the  riglit  to  strike. 

The  autocratic  attitude  and  destructive  action  of  the  United 
States  Steel  Corporation  and  its  subsidiary  branches  to  oppress 
the  workers  l)y  denying  them  the  exercise  of  their  freedom  of 
action,  freedom  of  association,  freedom  of  expression,  must 
give  way  to  a  better  understanding  and  relation  and  to  secure 
the  wage-earners  in  the  exercise  of  their  rights  and  liberties  as 
free  workers  and  citizens. 

Rights  of   Wage-Earners 

We  protest  against  the  attitude  and  action  of  the  majority 
of  the  representatives  of  the  employers  in  the  employers'  group 
who  participated  in  the  President's  industrial  conference  Oc- 
tober 6-24,  1919. 

The  proposals  wliich  the  rcpicstntatives  of  labor  submitled 
to  that  conference  were  conservative,  constructive  and  helpful. 
They  were  calculated  to  establish  a  working  basis  for  the  pro- 
motion of  better  relations  between  employers  and  workers — the 
right  to  organize,  the  right  to  collective  bargaining  through 
representatives  of  the  workers'  own  choosing.  The  represen- 
tatives of  the  public  constituted  as  a  group  indorsed  and  voted 
for  that  principle.  By  a  small  majority  the  employers'  group 
voted  against  it  and  thus  the  proposals  were  defeated  and  the 
conference  failed. 

The  protection  of  the  rights  and  interests  of  wage-earners  in 
national,  state  and  mimicipal  service  requires  for  them  the  right 
of  organization.  Since  the  interests  of  these  workers  can  be 
best  promoted  through  legislation  and  administration,  their  right 
to  organization  and  affiliation  with  the  A.  F.  of  L.  must  at  all 
times  be  safeguarded. 

The  paramount  issues  that  concern  all  the  people  of  the 
United  States,  and  in  particular  the  wage-earners,  are  the  per-' 
version  and  the  abuse  of  the  writ  of  injunction  and  the  neces- 
sity for  full  and  adequate  protection  of  the  voluntary  associa- 
tions of  wage-earners  organized  not  for  profit. 


PROBLEMS   OF    LABOR  29 

Injunction  a  Revolutionary  Measure 

The  injunction  as  now  used  is  a  revolutionary  measure  which 
substitutes  government  by  judicial  discretion  or  bias  for  govern- 
ment by  law.  It  substitutes  a  trial  by  one  man,  a  judge,  in  his 
discretion,  for  a  trial  by  jury.  This  abuse  of  the  injunctive 
process  undermines  and  destroys  the  very  foundation  of  our 
free  institutions.  It  is  subversive  of  the  spirit  of  a  free  people 
working  out  their  destiny  in  an  orderly  and  rational  manner. 

Because  we  have  reverence  for  law,  because  we  believe  that 
every  citizen  must  be  a  guardian  of  the  heritage  given  us  by 
our  fathers  who  fought  for  and  established  freedom  and  democ- 
racy, by  every  lawful  means  we  must  resist  the  establishment  of 
a  practice  that  would  destroy  the  very  spirit  of  freedom  and 
democracy.  Our  protest  against  the  abuse  of  the  writ  of  in- 
junction and  its  im warranted  application  to  labor  in  the  exercise 
of  labor's  normal  activities  to  realize  laudable  aspirations  is  a 
duty  we  owe  to  ourselves  and  posterity. 

To  penalize  strikes  or  make  them  unlawful  is  to  apply  an 
unwarrantable  and  destructive  method  when  a  constructive  one 
is  available.  To  reduce  the  necessity  for  strikes,  the  cause 
should  be  found  and  removed.  The  government  has  a  greater 
obligation  in  this  matter  than  to  use  its  coercive  powers. 

To  promote  further  the  production  of  an  adequate  supply 
of  the  world's  needs  for  use  and  higher  standards  of  life,  we 
urge  that  there  be  established  co-operation  between  the  scien- 
tists of  industry  and  the  representatives  of  organized  workers. 

Credit  is  the  life  blood  of  modern  business.  At  present  under 
the  control  of  private  financiers  it  is  administered  not  primarily 
to  serve  the  needs  of  production,  but  the  desire  of  financial 
agencies  to  levy  a  toll  upon  community  activity  as  high  as  "the 
traffic  will  bear." 

Credit  is  inherently  social.  It  should  be  accorded  in  propor- 
tion to  confidence  in  production  possibilities.  Credit  as  now  ad- 
ministered does  not  serve  industry,  but  burdens  it.  It  increases 
unearned  incomes  at  the  expense  of  earned  incomes.  It  is  the 
centre  of  malevolent  forces  that  corrupt  the  spirit  and  purpose 
of  industry. 

We  urge  the  organization  and  use  of  credit  to  serve  produc- 
tion needs  and  not  to  increase  the  income  and  holdings  of  fi- 
nanciers.    Control  over  credit  should  be  taken   from  financiers 


30  SELECTED   ARTICLES 

and  should  be  vested  in  a  public  agency  able  to  administer  this 
power  as  a  public  trust  in  the  interests  of  all  the  people. 

Policy  of  Railroad  Operation 

Since  the  government  has  not  worked  out  a  constructive  rail- 
road policy  we  urge  for  and  on  behalf  of  the  railway  workers 
and  of  the  general  public  that  the  railroads  be  retained  under 
government  administration  for  at  least  two  years  after  January 
I,  1920,  in  order  that  a  thorough  test  may  be  made  of  govern- 
mental operations  under  normal  conditions.  The  common  car- 
riers of  this  country  are  the  arteries  of  travel,  commerce  and  in- 
dustry. Transportation  service  and  rates  are  intimately  bound 
up  with  industrial  production  in  all  parts  of  the  country.  It  is 
essential  that  a  thorough  test  be  given  to  all  phases  of  railroad 
control  and  operated  before  a  definite  peace-time  policy  be 
finally  concluded. 

Never  has  the  world  been  confronted  with  a  more  serious 
situation.  Millions  are  in  want,  facing  starvation.  The  chil- 
dren of  war-stricken  Europe,  half  fed,  underdeveloped,  appeal 
for  help.  Only  with  infinite  pain,  unnecessary  loss  of  life  and 
slowness  of  result  can  Europe  rebuild  her  industries,  restore 
her  agriculture  and  re-establish  her  commerce  without  the  help 
of  America. 

The  treaty  setting  forth  the  terms  of  peace  has  not  been 
ratified  by  the  United  States.  Boundaries  are  not  fixed. 
Peoples  are  uncertain  as  to  their  allegiance.  Under  such  condi- 
tions exchange  and  credit  have  lost  voltage  and  in  turn  have 
paralyzed  industry. 

As  members  of  an  organized  labor  movement  that  has  for 
years  maintained  fraternal  relations  with  the  working  people 
of  Europe,  we  feel  that  our  nation  cannot  with  honor  and  hu- 
manity maintain  a  policy  of  isolation  and  disinterestedness  for 
the  distress  and  suffering  of  the  peoples  of  Europe.  Even  if 
the  necessity  of  the  peoples  of  Europe  did  not  have  a  compel- 
ling appeal,  the  inter-related  economic  interests  of  the  world 
would  prevent  our  limiting  our  attention  solely  to  this  hemi- 
sphere. 

Ratification  of  Peace  Treaty 

The  peace  treaty  includes  provisions  in  an  international 
agreement  to  prevent  war  among  nations,  Avith  all  its  cruelties 
and  sacrifices  of  human  life;  with  its  burden  of  indebtedness 


PROBLEMS   OF   LABOR  31 

and  taxation ;  for  reduction  in  standing  armies,  the  diminution 
of  great  navies,  and  the  Hmitation  of  the  production  of  arms 
and  amunition.  If  the  senate  shall  fail  to  ratify  the  treaty  of 
Versailles,  our  nation  may  be  isolated  from  other  countries  of 
the  world,  which  at  some  time  might  be  pitted  against  us.  Such 
isolation  and  possibilities  would  make  necessary  the  cre-ation  and 
maintenance  of  a  large  standing  army  and  a  greater  and  more 
effective  navy,  in  order  in  some  degree  to  protect  the  republic 
of  the  United  States  from  aggression  by  those  countries  which 
were  our  allies  in  the  great  war  and  which  were  and  are  now 
our  friends. 

In  addition,  the  workers  of  America  have  a  deep  interest  and 
concern  in  the  labor  draft  convention  of  the  treaty  and  in  its 
p-.irpose  to  raise  to  a  higher  standard  the  conditions  of  life  and 
labor  among  peoples  of  all  countries.  Its  cardinal  declarations 
and  provisions  are  that  labor  should  not  be  regarded  ns  a  com- 
modity, that  the  eight-hour  day  and  48-hour  week  are  standard; 
that  there  shall  be  one  day  of  rest,  preferably  Sunday,  in  each 
week;  that  child  labor  shall  be  abolished,  and  continuing  edu- 
cation for  young  workers  assured;  that  men  and  women  shall 
receive  equal  pay  for  equal  work;  that  industrial  better- 
ments shall  be  enforced  by  proper  inspection,  in  which  women 
as  well  as  men  shall  take  part ;  that  wages  shall  be  sufficient  to 
maintain  a  reasonable  standard  of  living,  as  this  is  understood 
in  each  clime  and  country,  and  that  employes  as  well  as  employ- 
ers have  the  right  of  association  for  all  lawful  purposes. 

The  United  States  is  protected  by  this  draft  convention  in 
two  ways.  First,  that  the  recommendations  which  international 
labor  conferences  under  the  treaty  may  recommend  may  be 
accepted  or  rejected  by  our  government;  second,  that  no  recom- 
mendation that  would  set  a  lower  standard  for  the  people  of 
the  United  States  than  already  exists  within  our  borders  can 
at  any  time  be  presented  for  consideration  and  action  by  the 
United  States. 

To  give  the  united  support  of  our  republic  and  of  the  allied 
countries  to  effective  machinery  to  release  the  standard  of  the 
workers'  condition  in  backward  countries ;  to  help  humanize  in- 
dustry for  the  common  world  weal,  is,  we  insist,  a  paramount 
duty  which  our  republic  must  perform.  We  insist,  for  the 
reasons  herein  set  forth,  that  it  is  the  immediate  duty  of  the 
senate  to  ratify  the  treaty  of  Versailles. 


32  SELECTED   ARTICLES 

Economic  and  Political  Field 

The  American  labor  movement  resents  the  attempt  of  re- 
actionaries and  autocrats  to  classify  the  men  and  women  of 
labor  with  those  groups  which  have  nothing  in  common  with 
its  constructive  purposes  and  high  ideals,  and  with  the  funda- 
mental principles  of  our  country.  Those  who  aim  to  strike  a 
blow  against  the  legitimate  operations  of  the  workers  in  their 
struggle  for  freedom  and  for  a  higher  and  a  better  life  must 
be  met  and  overcome. 

We  call  upon  all  those  who  contribute  service  to  society  in 
any  form  to  unite  in  the  furtherance  of  the  principles  and  pur- 
poses and  for  the  rectification  of  the  grievances  herein  set 
forth.  We  call  especial  attention  to  the  fact  that  there  is  a 
great  community  of  interest  between  all  who  serve  the  world. 
All  workers,  whether  of  this  city  or  country,  mine  or  factory, 
farm  or  transportation,  have  a  common  path  to  tread  and  com- 
mon goal  to  gain. 

Legislation  wliich  proposes  to  make  stnl.es  unlawful,  or  to 
compel  the  wage-earners  to  submit  their  grievances  or  aspira- 
tion- to  courts  or  governmental  agencies,  is  an  in\asion  of  the 
rights  of  the  wage-earners,  and  when  enforced  makes  for  in- 
dustrial slavery 

Aiiti-Sfrike  Legislation 

We  specifically  denounce  the  anti-strike  provision  of  tlic 
Camn-ins  bill  and  all  ."^imilar  proposed  legislation  as  tm-Anier- 
ican,  as  being  vicious  in  cliaracter  and  establishing  by  legisla- 
tion involuntary  servitude. 

The  warning  given  by  Jefferson  that  the  danger  to  the  people 
of  this  republic  lies  in  tho  usurpation  of  our  judiciary  of  uncon- 
stitutional authority  has  been  fully  demonstrated.  A  judiciary 
unresponsive  to  the  needs  of  tlie  '.inie,  arrogating  lo  itself 
power?  which  neither  the  constitution  noi  the  purposes  of  our 
laws  liave  conferred  upon  them,  dem;inds  that  i;t  least  in  our 
time  Americans  must  insist  upon  safeguarding  their  liberties 
and  the  spirit  of  sacred  institutions  of  our  republic. 

We  urge  that  the  judges  of  our  federal  courts  shall  be  elected 
l)y  the  people  for  terms  not  exceeding  six  years. 

We  declare  that  the  voluntary  organization  of  the  workers, 
organized  not  for  profit,  arc  agencies  of  justice  in  industry  and 


PROBLEMS    OF   LABOR  33 

trade.  Despite  legislative  declaration  that  trade  unions  do  not 
come  under  the  provisions  of  anti-trust  legislation,  courts  have 
not  understood  and  are  not  now  able  or  willing  to  understand 
that  the  organizations  of  wage-earners  are  not  conspiracies  in 
restraint  of  trade. 

We  submit  that  anti-trust  legislation  has  not  only  been  in- 
terpreted to  serve  the  purpose  of  outlawing  trade  unions,  rob- 
bing them  of  their  treasuries  and  the  savings  of  the  members 
and  depriving  them  of  their  legal  and  natural  rights  to  the 
exercise  of  normal  activities,  but  that  it  has  also  failed  com- 
pletely to  protect  the  people  against  the  outrageous  machina- 
tions of  combinations  and  monopolies. 

The  United  Mine  Workers  of  America  did  all  in  their  power 
to  avert  an  industrial  controversy  in  the  coal  industry.  The 
autocratic  attitude  of  the  mine  owners  was  responsible  for  the 
losses  and  sufferings  entailed.  While  the  miners  have  returned 
to  the  mines  and  have  only  now  been  afforded  the  opportunity 
cf  having  their  grievances  and  demands  brought  to  the  light  of 
reason,  it  is  our  hope  that  a  full  measure  of  justice  will  be  ac- 
corded them  even  at  this  late  date. 

Standard  of  Living 

There  is  a  widespread  belief  that  wages  should  be  fixed  on 
a  cost-of-living  basis.  This  idea  is  pernicious  and  intolerable. 
It  means  putting  progress  in  chains  and  liberty  in  fetters.  It 
means  fixing  a  standard  of  living  and  a  standard  of  life  and 
liberty  which  must  remain  fixed.  America's  workers  cannot 
accept  that  proposition. 

They  demand  a  progressively  advancing  standard  of  life. 
They  have  an  abiding  faith  in  a  better  future  for  all  mankind. 
They  discard  and  denounce  a  system  of  fixing  wages  solely  on 
the  basis  of  family  budgets  and  bread  bills.  Workers  are  en- 
titled not  only  to  a  living,  but  modern  society  must  provide 
more  than  what  is  understood  by  the  term  "a  living."  It  must 
concede  to  all  workers  a  fairer  reward  for  their  contribution 
to  society,  a  contribution  without  which  a  progressing  civiliza- 
tion is  impossible. 

No  factor  contributes  more  to  industrial  unrest  and  insta- 
bility than  excessive  costs  of  necessaries  of  life.  It  is  a  demon- 
strated truth  that  the  cost  of  living  has  advanced  more  rapidly 
than  have  wages.    The  claim  that  increasing  wages  make  neces- 


34  SELECTED   ARTICLES 

sary  increased  prices  is  false.  It  is  intended  to  throw  upon  the 
workers  the  blame  for  a  process  by  which  all  the  people  have 
been  made  to  suffer.  Labor  has  been  compelled  to  struggle 
despcratcl}-  to  keep  wages  in  some  measure  up  to  the  cost  of 
living.  The  demand  for  higher  compensation  to  meet  new  price 
levels  has  made  industrial  readjustment  necessary.  Existing 
high  and  excessive  prices  are  due  to  the  present  inflation  of 
money  and  credits,  to  profiteering  by  those  who  manufacture, 
sell  and  market  products  and  to  burdens  levied  by  middlemen 
and  speculators. 

The  deflation  of  currency,  prevention  of  hoarding  and  unfair 
price  fixing,  establishment  of  co-operative  movements  operated 
under  the  Rochdale  system,  making  accessible  all  income  tax 
returns  and  dividend  declarations  as  a  direct  and  truthful  means 
of  revealing  excessive  costs  and  profits. 

Industrial  Co-operation  Necessary 

Labor  iniderstands  fully  that  powerful  interests  today  are 
determined  to  achieve  reaction  in  industry  if  possible.  They 
seek  to  disband  or  cripple  the  organizations  of  workers.  They 
seek  to  reduce  wages  and  thus  lower  the  standard  of  living. 
They  seek  to  keep  from  restriction  their  power  to  manipulate 
and  fix  prices.  They  seek  to  destroy  the  democratic  impulse  of 
the  workers  which  is  bred  into  their  movement  by  the  democ- 
racy of  the  American  republic. 

Labor  must  be  and  is  militant  in  the  struggle  to  combat  these 
sinister  influences  and  tendencies.  Labor  will  not  permit  a  re- 
duction in  the  standard  of  living.  It  will  not  consent  to  re- 
action toward  autocratic  control.  In  this  it  is  performing  a 
public  service. 

We  hold  that  the  organization  of  wage-earners  into  trade 
union  and  the  establishment  of  collective  bargaining  are  the 
first  steps  toward  the  proper  development  of  our  industrial  ma- 
chinery for  service. 


CAUSES  OF  FRICTION  AND  UNREST 
LABOR'S    INDUSTRIAL    DEMANDS' 

Causes  of  Labor  Unrest 

The  present  Labor  unrest  is  due  to  many  causes,  and  it  is 
important  to  separate  those  which  are  permanent  from  those 
which  are  temporan,-.  Among  the  latter  we  maj'  note  especially 
the  high  cost  of  living,  the  large  amount  of  unemployment,  and 
the  anxietN'  to  which  this  gives  rise,  a  certain  impatience  due  to 
the  exhaustion  and  strain  of  a  long  war,  uncertainty  as  to  the 
method  of  fulfillment  of  the  promises  given  to  trade  unions,  the 
knowledge  that  many  people  have  made  enormous  profits  out 
of  a  world  disaster,  and  the  belief  that  a  nation  which  can  find 
£7,000,000  a  day  for  war,  over  a  period  of  years,  can  afford  to 
maintain  its  workers  on  a  scale  that  formerly  seemed  well-nigh 
impossible.  Moreover,  there  is  a  strong  feeling  among  the 
workers  that  the  psychological  moment  for  them  to  improve 
their  lot  has  arrived,  and  that  if  they  fail  to  take  the  fullest 
possible  advantage  of  it,  such  an  opportunity  may  never  occur 
again.  They  think  that  industrial  conditions,  in  a  year  or  two, 
will  have  settled  down,  for  good  or  evil,  into  a  groove,  and  then 
it  will  be  a  slow  and  laborious  process  to  change  them. 

But  underneath  these  temporary  causes  of  unrest,  there  are 
others  which  are  permanent,  and  only  as  we  succeed  in  re- 
moving these  can  we  hope  for  any  enduring  settlement.  Briefly, 
the  permanent  causes  are  four.  First,  the  workers,  better  edu- 
cated, more  alert,  more  conscious  both  of  their  disabilities  and 
of  their  strength  than  they  have  ever  been  before,  are  de- 
termined to  secure  a  standard  of  living  which,  at  the  very  least, 
will  raise  them  above  the  poverty  line.  They  refuse  to  believe 
that  it  is  an  essential  condition  of  modern  society  that  the  great 
mass  of  them,  year  after  year,  should  constantly  be  confronted 

1  From  an  article  by  B.  Seebohm  Rowntree,  Christian  Science  Moni- 
tor,  May  20,  1919.  Mr.  Rowntree  is  a  director  of  the  famous  chocolate 
manufacturing  firm  of  Rowntree  &  Co.  Ltd.,  York,  Eng.,  and  a  writer  on 
economic   topics. 


36  SELECTED   ARTICLES 

by  the  problem  of  making  two  ends  meet,,  which  were  never 
intended  to  meet.  Meanwhile,  they  see  much  of  the  wealth  of 
the  community  continually  sidetracked,  as  it  were,  in  favor  of 
the  comparative  few,  and  they  grow  more  and  more  determined 
to  safeguard  the  interests  of  the  many. 

Demand  for  Control 

Secondly,  workers  have  begun  to  protest  against  the  posi- 
tion occupied  by  labor  in  the  world  of  industry.  There  is  a 
resolute  and  definite  claim  on  their  part  to  take  a  share  in  con- 
trolling industrial  conditions.  The  views  of  the  Syndicalist  and 
Guild  Socialist  are  only  held  by  a  small  minority,  but  the  de- 
mand for  a  substantial  measure  of  control  is  widespread. 

Thirdly,  there  is  a  demand  that  workers  who  are  capable 
of  working  and  willing  to  work  should  be  freed  from  the 
menace  of  unemployment,  which  at  present  hangs  like  a  dark 
cloud  over  the  lives  of  millions. 

Lastly,  the  workers  ask  for  shorter  hours.  There  is  a  grow- 
ing conviction  among  them  that  life  should  mean  something  more 
than  "bed  and  work."  Moral  and  intellectual  claims  have  not 
been  preached  in  vain,  and  those  who  lead  in  the  Labor  ranks 
realize  fully  that  a  man  who  leaves  home  for  work  at  5  or 
5  :30  in  the  morning,  and  does  not  return  until  5  :30  or  6  o'clock 
at  night,  has  neither  the  vitality  nor  the  leisure  for  self- 
development. 

These,  then,  are  Labor's  four  principal  demands.  If  they 
are  met  on  fair  terms,  we  shall  have  industrial  peace.  If  they 
are  refused,  we  shall  have  industrial  war.  Clearly,  we  must 
decide  whether  they  are  just  and  reasonable.  If  we  believe 
that  they  arc,  then  we  must,  without  delay,  consider  how  to 
give  effect  to  them,  not  in  a  niggardly  or  parsimonious  spirit, 
but  as  fully  as  the  economic  circumstances  of  industry  will 
permit. 

"But  let  us  beware  of  :i  serious  danger.  The  demands  which 
I  have  formulated  must  be  dealt  with,  not  only  at  once,  but  as 
a  whole.  To  attempt  to  deal  with  them  separately,  or  in  a 
piecemeal,  half-hearted   fashion,   is  to  court   certain   failure. 

IV ages  and  Cost  of  Living 

Clearly,  the  advance  in  wages  which  we  wish  to  secure  must 
be  an  advance  in  real  wages.  An  advance  which  involves  a 
corresponding  advance  in  the  cost  of  living  can  serve  no  useful 


TROBLEMS    OF    LAtOR  37 

purpose.  But,  as  Dr.  Bowley  has  clearly  demonstrated  in  his 
pamphlet  on  "The  Division  of  the  Product  of  Industry,"  a  sub- 
stantial increase  in  wages  involves  an  increased  production  and 
an  increased  efficiency  which  can  only  be  guaranteed  by  the 
whole-hearted  efforts  of  employers  and  workers  alike.  Now, 
_  cordial  cooperation  between  Capital  and  Labor  is  impossible, 
unless  Labor  is  given  a  real  share  in  controlling  working  condi- 
tions, and  is  adequately  safeguarded  against  the  consequences 
of  unemployment  arising  from  any  purely  temporary  disloca- 
tion which  may  follow  on  the  introduction  of  labor-saving  ma- 
chinery or  improved  methods. 

Coming  to  concrete  proposals  for  immediate  action,  I  be- 
lieve that  the  following  steps  should  be  taken,  if  we  desire  to 
have  peace  in  the  world  of  industry. 

1.  A  trade  board  should  be  set  up  for  every  industry,  and 
the  duty  should  be  imposed  upon  it  by  statute  of  fixing,  at  the 
earliest  possible  moment,  minimum  wages  which  will  enable  a 
man  to  marry  and  to  maintain  a  family  of  normal  size  in  a 
state  of  physical  efficiency,  with  a  certain  margin  for  contingen- 
cies and  recreation. 

For  the  v/oman  worker,  the  minimum  wage  should  be  suffi- 
cient to  maintain  her  in  health  and  respectability  with,  similarly, 
a  small  margin  for  incidental  expenses.  I  think  that  this  method 
is  preferable  to  that  of  fixing  a  national  minimum  wage  by 
Parliament. 

2.  As  a  first  step  toward  giving  the  workers  a  quite  defi- 
nite share  in  the  control  of  industry,  Wliitley  councils  should 
be  established  in  all  industries.  But  I  am  confident  that  these 
will  fail  without  the  universal  establishment  of  workshop  com- 
mitees  which  exercise  real  authority.  In  addition,  a  commis- 
sion should  be  set  up  to  consider  whether  the  workers  should 
be  given  still  further  control  at  once,  and  if  so,  by  what  methods. 

3.  An  inquiry  should  immediately  be  set  on  foot  into  the 
difBcult  question  of  how  the  workers  may  best  share  in  the 
prosperity  of  the  industries  in  which  they  are  engaged.  Profit- 
sharing,  as  ordinarily  practiced,  has  not  been  generally  success- 
ful in  stimulating  their  best  efforts.  Some  scheme  must  be  de- 
vised whereby  the  workers  will  have  before  them  all  the  facts 
regarding  the  profits  made  in  their  particular  industry.  When 
Capital  has  been  paid,  the  minimum  amount  which  will  attract 
whatever  supplies  of  it  are  necessary  for  the  development  of 
that  industry,  the  remainder  of  the  profits  must  be  shared  be- 


38  SELECTED  ARTICLES 

tween  Capital  and  Labor  in  an  agreed  proportion.  It  must  be 
made  worth  while  for  every  worker  to  do  his  best.  In  any 
arrangement  come  to,  it  would  of  course  be  necessary  to  safe- 
guard the  interests  of  the  consumer. 

4.  Unemployment  insurance  on  a  scale  which  will  free  the 
workers  from  any  danger  of  real  suffering  or  privation  through 
lack  of  work  should  be  made  universal  and  compulsory.  Its 
cost  should  be  distributed  between  the  workers,  the  employers 
and  the  state,  as  it  is  in  the  insured  trades. 

5.  Parliament  should  at  once  pass  an  act  making  48,  or 
perhaps  47  hours,  the  maximum  normal  working  week  in  all 
industries.  Modifications,  according  to  seasons,  would  be  neces- 
sary in  certain  trades. 

Deprecates  Superficial  Remedies 

It  may  be  urged  by  some  readers  that  these  are  drastic  pro- 
posals, but  the  position  today  is  such  that  no  superficial  remedy 
will  avail  to  bring  about  an  industrial  peace.  Fundamental 
changes  are  called  for.  If  we  face  the  situation  boldly  and 
wisely,  an  industrial  revolution  whose  consequences  are  wholly 
good,  may  be  brought  about  by  peaceful  means.  But  if  those 
who,  in  the  past,  have  exercised  an  autocratic  sway,  buying 
labor  as  cheaply  as  possible,  and  scrapping  it  without  a  thought 
when  it  had  served  their  purpose,  insist  on  carrying  into  the 
new  world  the  methods  they  employed  in  the  old  one,  we  shall 
still  have  a  revolution,  but  it  may  well  be  disastrous  both  to 
Capital  and  Labor. 

Only  if  we  make  it  clear  that  we  realize  the  situation,  and 
are  already  coping  with  it  to  the  best  of  our  ability,  can  we 
justly  ask  the  workers  to  be  patient,  and  to  remember  that 
Rome  was  not  built  in  a  day.  I  think  that  they  could  be  per- 
suaded to  patience  if  they  could  be  quite  certain  that  Rome 
was  actually  being  built  with  all  possible  speed.  But,  rightly 
or  wrongly,  they  suspect  that  the  employing  classes  do  not 
really  mean  business  in  the  great  task  of  creating  a  new  and  bet- 
ter England.  Now  this  suspicion  can  not  be  exercised  by 
promises  or  prophecies.  In  one  way  or  another,  our  vast  com- 
munity must  actually  pool  its  interests,  and  those  must  lead  the 
way  who  have  the  most  to  pool.  We  have  faced  death,  we 
must  now  face  life,  not  as  classes,  not  as  sections,  and  not  as 
individuals,  but  as  a  united  nation." 


PROBLEMS   OF   LABOR  39 

WHAT'S  WRONG   WITH   INDUSTRY?' 

It  depends  upon  one's  point  of  view  what  answer  is  given 
to  the  question,  "What's  wrong  with  industry?"  Even  to-day 
there  are  probably  some  who  would  ascribe  what  is  wrong  to 
that  bugbear  of  the  complacent  and  comfortable,  the  "wicked 
agitator,"  who  refuses  to  let  well  enough  alone.  There  are  others 
who,  still  impregnated  with  the  social  theory  of  the  poor  law  re- 
formers of  1834,  seek  to  find  the  root  of  the  matter  in  the  lazi- 
ness of  the  masses.  Then,  again,  there  are  employers  and 
others  who  hold  the  view  that  what  is  wrong  with  industry  is 
the  stubborn  determination  of  trade  unionists  to  cling  to  out- 
worn rules  and  practices.  Others,  again,  trace  all  the  industrial 
evils  of  to-day  to  the  absence  of  protective  tariffs.  There  are 
some  bewildered  employers,  tossed  about  on  the  cross-currents 
of  industrial  thought  and  feeling,  who  frankly  "don't  know 
what  things  are  coming  to." 

There  are  obviously  many  defects  in  the  industrial  system. 
To  those  who  seek  to  throw  the  chief  blame  upon  the  workers, 
we  could  retort  that  industrial  statesmanship  has  been  lacking, 
that  employers  have  been  short-sighted,  that  their  methods  have 
long  been  obsolete,  and  that  they  have  been  vastly  overpaid  for 
such  services  as  they  have  rendered. 

But  the  chief  defect  of  modern  industry  is  that  it  has  no 
moral  basis.  Perhaps  in  no  government  document  has  this  been 
brought  out  more  clearly  than  in  the  recently  published  Interim 
Report  of  the  Committee  on  Adult  Education,  devoted  to  the 
bearing  of  industrial  and  social  conditions  upon  the  opportun- 
ities of  citizens  for  education. 

The  committee,  over  which  the  Master  of  Balliol  presides, 
includes  four  trade  unionists,  two  employers,  two  women,  and 
several  members  prominently  identified  with  various  kinds  of 
educational  work,  such  as  the  Universities,  the  Workers'  Edu- 
cational Association,  the  Adult  School  Movement,  the  Central 
Labor  College,  and  the  Cooperative  Movement.  The  function 
of  the  committee  is  "to  consider  the  provision  for,  and  possibili- 
ties of,  adult  education  (other  than  technical  or  vocational)  in 
Great  Britain,  and  to  make  recommendations."  Its  point  of 
view  is  therefore  human,  and  not  economic;  and  it  has  put  on 
record   its  ideas   regarding  industrial   reconstruction    from    that 

1  Living  Age.      299:588-90.      December   7,    1918. 


40  SELECTED   ARTICLES 

standpoint.  It  is  concerned  with  moral  and  not  economic  stand- 
ards. Much  that  is  contained  in  the  report  is  not  new,  but  it 
is  the  first  time  that  any  government  report  has  analyzed  the 
conditions  of  industrial  life  in  relation  to  personal  development 
and  social  usefulness.  The  committee  explains  that  it  was 
driven  to  this  line  of  inquiry  because  it  was  faced  at  the  out- 
set with  the  grave  obstacles  which  hamper  workingmcn  and 
women  in  their  desire  for  knowledge. 

In  direct  opposition  to  the  dictum  "business  is  business,"  it 
proclaims  the  revolutionary  truth  that  "industry  exists  for  man, 
not  man  for  industry."  This  sentence  pricks  the  bubble  of 
modern  industry.  The  committee  refuses  to  accept  the  view 
that  "the  exigencies  of  industrial  efficiency  are  of  such  para- 
mount importance  that  the  development  of  personality  must 
inevitably  and  rightly  be  subordinated  to  them."  This  brings 
the  committee  very  close  to  what  is  really  wrong  with  the  in- 
dustrial system,  and  the  following  quotation  penetrates  to  the 
heart  of  the  error  : 

There  can  be  no  doubt  tbat  the  degradation  of  human  beings  to  the 
po'^ition  of  mere  "hands,"  and  the  treatment  of  labor  as  a  commodity 
to  be  bought  and  sold,  has  created  a  revolt  in  the  minds  of  a  large  sec- 
tion of  the  community.  The  conditions  of  indu.stnal  life  have  only  too 
often  outraged  human  personality.  .  .  .  While  a  very  large  proportion  ot 
the  working  population  has  not  clearly  formulated  its  tundamental  ob- 
jections to  the  conditions  and  circumstances  of  industrial  life,  the  articu- 
late minority  is  placing  an  increasing  emphasis  upon  what  may  be  called 
the  moral  factors.  There  is  undoubtedly  a  growing  feeling  of  dissatis- 
faction on  the  part  of  workpeople  with  what  they  regard  as  their  position 
of  inferiority.  This  inferiority,  it  is  urged,  is  due  to  a  forced  sub- 
mission to  undesirable  conditions,  to  the  subjection  of  the  worker  both 
to  the  machine  and  to  the  will  of  others,  who  are  vested  with  an  au- 
thority in  which  the  workers  have  no  share.  The  new  currents  ot  thought, 
which  during  the  past  few  years  have  increasingly  agitated  Labor,  are  a 
sign  of  a  deep-seated  reaction  against  the  dehumanizing  influences  siir- 
lounding  industrial  life.  One  of  the  most  insistent  demands  made  by 
the  rising  generation  of  workers  is  for  what  is  called  "industrial  control. 
The  view  which  they  hold  is  that  the  subordination  of  the  worker  to  an 
industrial  policy  and  to  regulations  for  which  they  are  not  themselves 
.lirectly  responsible  is  unjustifiable,  because  it  is  mconsi.stent  with  the 
rights  and  obligations  which  ought  to  be  inherent  m  membership  of  any 
organized  group  within  society.  They  believe  that  industrial  democracy 
is    as    essential    to    individual    freedom    as    political    democracy. 

The  movement  is  significant,  because  it  gives  evidence  of  a  growing 
desire  for  new  responsibilities.  .  .  .  From  the  point  of  view  of  both  the 
individual  and  the  community  it  is  desirable  that  the  new  claims  should 
somehow    be    met. 

The  committee  points  out  that  it  is  beyond  its  scope  to  deal 
with  the  methods  which  should  be  adopted,  but  it  is  clearly  con- 
cerned with  "the  fundamental  criticism  that  the  present  indus- 
trial system  offers  little  opportunity  for  the  satisfaction  of  the 
intellectual,  social,  and  artistic  impulses." 


PROBLEMS    OF    LABOR  .|i 

The  implications  of  the  above  quotation  are  far-reaching, 
and  strike  at  the  roots  of  modern  industry.  What  is  wrong 
with  industry  is  clearly  a  moral  question.  The  great  need  is 
not  for  increased  output  or  protective  tariffs,  but  for  a  revolu- 
tion in  our  attitude  towards  the  economic  system.  The  first 
need  is  to  insure  adequate  remuneration,  human  conditions,  and 
human  relations  in  industry.  And  by  human  relations  we  mean, 
not  the  revival  of  benevolence  and  philanthropy,  but  the  aboli- 
tion of  those  vital  defects  referred  to  above,  and  more  particu- 
larly the  inferior  status  of  the  worker.  The  new  claims  of  the 
workers  for  responsibility  must,  as  the  committee  agree,  "some- 
how be  met."  This  is  the  real  problem  of  modern  industry.  It 
will  be  solved  as  the  trade  unions  adapt  their  organization  to 
the  new.  needs,  and  as  the  demand  for  "industrial  control"  in- 
creases and  becomes  more  coherent.  In  the  meantime,  the  State 
must  be  called  upon  to  redress  the  balance  against  the  workers, 
and  to  establish  such  standards  and  conditions  as  are  essentia! 
to  a  people  with  the  responsibilities  of  citizenship.  We  may, 
perhaps,  quote  the  words  of  the  committee: 

\Vc  have  approached  the  matters  (halt  with  in  our  present  report  from 
the  human  rather  than  the  economic  point  of  view.  If  the  individual  is 
to  make  the  most  of  his  powers,  if  the  citizen  is  to  be  worthy  of  the 
responsibilities  thrown  upon  him  by  the  ever-increasing  complexity  of  life 
in  a  modern  community,  in  other  words  if  education  in  any  meaning  of 
the  term  is  to  become  a  reality,  certain  definite  conditions  of  life  are 
indispensable.  The  parainount  consideration  is  that  of  the  individual  as  a 
member  of  society.  Material  progress  is  of  value  only  in  so  far  as  it 
assists  towards  the  realization  of  huinan  possibilities.  Industry  and  com- 
.merce  and  the  social  conditions  which  are  in  a  large  degree  dependent 
upon  them  must  in  our  opinion  be  regarded  from  this  point  of  view,  and, 
if  they  cramp  the  life  of  the  individual,  no  amount  of  economic  argu- 
ment will  suffice  to  justify  ihem.  .  .  .  We  do  not  think,  however,  that 
there  is  of  necessity  a  fundamental  antagonism  between  ethics  and  eco- 
nomics. Adequate  pay,  reasonable  hours  of  labor,  the  super-session  of 
heavy,  degrading,  and  monotonous  forms  of  manual  labor  by  machinery 
and  improved  processes,  the  provisions  of  holidays,  the  introduction  of 
human  relations  and  the  social  inotive  into  industry,  healthy  homes  and 
a  cheerful  environment — these  are  the  indispensable  conditions  of  economic 
efficiency;  they  are  also  among  the  elementary  rights  to  which  the  citizen, 
as    such,    and    in    virtue    of    his    responsibilities,    is    entitled. 

The  committee  make  definite  proposals,  which  strongly  sup- 
port the  expressed  views  of  organized  labor.  The  chief  recom- 
mendations may  be  summarized  as  follows : 

1.  The  establishment  of  a  normal  legal  working  day  of 
eight  hours,  with  a  shorter  working  day  for  those  employed 
in  heavy  and  exhausting  kinds  of  work,  or  work  accompanied 
by  special  disabilities. 

2.  The  close  regulation  and   reduction  of  overtime. 


42  SELECTED  ARTICLES 

3.  The   abolition   of   night  work,   except   where   it   is   abso- 
lutely essential. 

4.  A  guarantee  of   some   reasonable   security  of  livelihood 

5.  The  establishment  of  a  legal  annual  holiday,  with  pay. 
The  five  points  of  this  character  alone,  if  adopted,  would,  a1: 

any  rate,  remove  some  of  the  worst  features  of  industrial  life 
and  liberate  the  energies  of  the  people  for  the  more  funda- 
mental problems  of  life  and  society.  The  workers  do  not  asl<; 
for  concessions ;  they  demand  opportunities  to  enable  them  to 
work  out  their  own  salvation.  What  is  wrong  with  industry  is 
that  it  has  deprived  the  workers  of  those  opportunities  of  lei- 
sure, and  the  exercise  of  their  powers.  This  is  an  evil  which  it 
must  be  one  of  the  first  tasks  of  reconstruction  to  eradicate. 


WHAT    LABOR   REALLY    WANTS' 

We  American  trades  unionists  take  the  present  industrial 
system  as  it  is.  It  evolved  from  something  else,  and  it  may 
devolve  into  something  else  again.  In  taking  our  position  we 
are  not  constrained  to  say  that  we  approve  the  capitalistic  in- 
dustry. But  here  it  is.  We  purpose  to  work  with  it  and  on  it. 
Leave  the  rest — the  future — to  .  evolution.  Our  fathers  intro- 
duced the  democratic  method  into  politics  and  it  has  gone  on 
evolving  democratically.  Let  us  introduce  it  into  industry  and 
let  it  go  on  evolving  democratically  there.  New  times,  new 
problems  and  new  issues — but  always  the  democratic  method. 
There  are  certain  things  that  we  want  now.  We  install  our 
democratic  method  to  deal  with  them.  The  same  method  will 
deal  with  what  we  want  tomorrow. 

The  essence  of  the  democratic  method  simply  is  that  labor 
shall  have  a  duly  acknowledged  right  to  participate  in  determin- 
ing all  regulation  of  wages  and  working  conditions  that  affect 
it.  Through  its  organization  labor  has  democratic  control  of 
itself.  Theoretically,  at  least,  corporations  are  democratic  or- 
ganizations of  the  owners  of  capital  or  its  users.  All  right, 
then,  let  them  settle  their  common  affairs  democratically.  That's 
all  there  is  to  it.     The  method  may  take  a  thousand  forms  in 


*  From  an  article  by  John  P.  Frey,  in  the  Metropolitan  Magazine.     No- 
nber    19x9-     Mr.    Frey   is   an   executive      office 
Molders  Union  and   Editor  of  its  official  journal. 


PROBLEMS   OF   LABOR  43 

practice.  The  form  may  vary  for  each  industry.  The  great 
thing  is  to  secure  the  universal  recognition  of  the  democratic 
idea.  I  would  not  undertake  to  say,  offhand,  for  instance,  how 
the  democratic  method  should  be  applied  to  the  steel  or  any 
other  industry.     The  principle  is  capable  of  infinite  adaptation. 

The  democratic  method  of  dealing  with  labor  questions  is 
practised  in  many  industries  either  locally  or  nationally,  but 
lack  of  effective  organization  on  one  side  or  the  other  and  fail- 
ure to  accept  the  principle  whole-heartedly  has  not  afforded  a 
fair  test  at  all  times.  The  principle  is  in  practice  in  the  coal 
mining  and  in  the  glass  industry'  in  a  general  way.  But  its  most 
thorough-going  acceptance  on  both  sides  and,  therefore,  its  best 
demonstrative  field,  is  in  the  stove-making  industry.  Let  me 
tell  3'ou  of  the  history  of  its  growth  and  utilization  in  that  in- 
dustry with  which,  as  a  molder,  I  am  best  acquainted. 

Stove-making  is  one  of  the  oldest  manufacturing  industries 
in  America;  it  was  also  one  of  the  first  in  which  labor  organ- 
ized. Almost  from  the  beginning  the  employers  were  organ- 
ized, and  one  of  the  purposes  of  their  organization  w^as  to  pre- 
vent the  employes  from  doing  likewise.  Thus  there  was  no 
common  ground — as  is  the  case  with  some  of  our  great  indus- 
tries today.  It  was  a  very  bitter  war  that  was  waged  in  the 
stove  industry  from  1855  to  1890.  Each  side  strove  to  secure 
its  ends  by  might  rather  than  by  negotiation  or  convention. 
There  was  a  complete  denial  of  democracy,  the  attitude  of  the 
emploj^ers  being  the  historic  one  of  the  industrial  Bourbons: 
"This  is  our  business  and  we  will  run  it  as  we  please."  They 
even  went  so  far  in  the  seventies  as  to  import  large  numbers 
of  molders  from  continental  Europe.  During  all  these  years 
the  industry  was  marked  by  such  a  succession  of  strikes  and 
lockouts  that  there  was  almost  no  time  when  there  wasn't  one 
somewhere.  One  in  1866  and  another  in  1868  were  almost  na- 
tional in  scope,  the  first  being  forced  by  the  molders  and  the 
second  by  the  foundrymen.  Many  of  the  foundries  went  into 
bankruptcj'  and  many  of  the  men  lost  their  homes  and  were 
nationally  blacklisted.  Weary  of  this  continuous  and  disastrous 
warfare,  leaders  of  the  Stove  Founders  National  Defense  As- 
sociation and  of  the  International  Molders  Union  began,  finally, 
in  1890,  to  feel  each  other  out.  In  1891  a  peace  treaty  was 
negotiated  and  ratified  between  the  two  national  organizations. 

It  was  the  first  agreement  of  the  kind  in  the  history  of  the 


44  SELECTED    ARTICLl-lS 

world ;  and  it  is  highly  significant  that  it  has  been  entirely  suc- 
cessful, though  at  the  time  it  was  received  coldly  and  with 
suspicion  by  many  of  the  employers  and  by  a  large  number 
of  the  men.  Each  side  questioned  the  good  faith  of  the  other. 
The  scheme  was  unheard  of,  it  was  revolutionary,  it  robbed  the 
employers  of  their  business,  it  was  absurd  for  workmen  to  think 
themselves  capable  of  passing  on  any  part  of  the  business,  etc. 

The  agreement  began  by  laying  down  the  principle  that  as 
the  foundrymen  and  the  molders  understood  their  common 
problems  better  than  anj-one  else,  arbitration  by  outsiders  would 
be  eliminated.  There's  where  the  democratic  idea  came  in. 
They  said :  "We  will  provide  a  method  by  which  we  may  settle 
our  family  differences  ourselves.  If  we  can't  settle  them  no- 
body can."  That  is  democracy  in  industry  for  j'ou  away  back 
in  1891 — though  nobody  gave  it  that  dignified  appellation  then. 
The  treaty  of  peace  was  declared  to  be  above  the  constitutions 
of  either  side.  It  was  agreed  that  a  committee  of  twelve,  six 
from  each  organization,  should  meet  together  once  every  year 
not  only  to  determine  what  tlie  terms  of  employment— wages 
and  hours — should  be,  I)ut  also  the  conditions  of  labor  and  the 
shop  rules  and  regulations.  These  twelve  men  are  the  law- 
makers of  the  stove  industry  and  they  have  been  making  laws 
successfully  for  27  years — so  successfully  that  there  have  been 
neither  strikes  nor  lockouts  in  that  period.  They  are  repre- 
sentative of  the  whole  industry  and  their  laws  are  as  demo- 
cratically made  as  the  municipal  law  of  the  land.  Being  made 
by  the  industry  for  the  industry  and  not  forced  on  it  by  out- 
siders or  autocratically  imposed  by  one  group  of  insiders,  they 
are  accepted  in  good  spirit  and  obeyed,  whether  liked  or  not. 
If  either  side  feels  that  the  decision  of  the  supreme  body  is 
unjust,  it  contents  itself  with  waiting  for  any  opportunity  to 
repeal  it  just  as  political  parties  do  in  political  life.  Every  ques- 
tion is  settled  by  a  majority  vote.  There  is  no  umpire  or 
referee. 

The  committee  views  the  industry  as  a  whole ;  each  half 
understands  the  peculiar  problems  of  the  members  of  the  other 
half.  Having  the  broader  view,  the  committee-men  often  find 
themselves  more  advanced  than  their  constituencies.  Such  a 
situation  is  patiently  manipulated  or  "played."  To  make  my 
meaning  clear  let  me  explain  that  sometimes  one  side  will  come 
into  a  meeting  with  a  proposal  that  is  so  well  backed  by  facts 
and     reason     that     the    other     side     immediately     concedes     its 


PROBLEMS   OF    LABOR  45 

righteousness.  "But,"  they  may  say,  "though  this  proposal  is 
right,  we  must  vote  against  its  adoption  at  this  time  because  our 
members  do  not  agree  with  us.  To  adopt  it  under  these  circum- 
stances would  be  to  invite  trouble.  Give  us  time  to  go  back  to 
our  people  and  educate  them  up  to  this  excellent  proposal." 

I  recall  an  interesting  case  in  point.  The  molders  had  a 
venerable  rule  that  the  ratio  of  apprentices  to  journeymen 
should  be  one  in  eight.  It  was  a  protective  measure,  but  the 
ratio  had  no  intrinsic  merit.  Like  many  other  things  it  stood 
because  it  always  had  been,  and  the  molders  regarded  it  as  one 
of  the  pillars  of  their  constitution.  From  the  very  beginning  of 
our  industrial  democracy  the  foundrymen  had  rightly  insisted 
that  the  rule  was  archaic,  absurd  and  unsound  because  it  repre- 
sented no  normal  relation,  tended  to  reduce  the  actual  number 
of  molders  and  to  restrict  the  proper  growth  of  the  industry 
At  last,  in  1901,  the  foundrymen's  members  of  the  committee, 
having  absolutely  proved  to  the  satisfaction  of  the  whole  body 
that  they  were  right,  called  for  a  showdown  and  a  decision  to 
change  the  ratio.  Our  members,  nevertheless  refused  the  de- 
mand because  they  knew^  and  so  explained  to  the  employers' 
representatives,  that  the  men  would  not  cheerfully  accept  the 
innovation  and  that  there  might  be  great  and  unpleasant  difficul- 
ties in  enforcing  it.  At  the  same  time  we  pledged  ourselves  to 
go  back  to  our  members,  tell  them  the  facts  and  try  to  convert 
them.  W'e  did  so  and  were  promptly  and  decisively  beaten  by 
a  referendum.  When  the  1902  meeting  of  the  joint  committee 
came  around,  the  employers  wanted  to  know  where  we  stood. 
Somewhat  shamefacedly,  we  had  to  confess  that  our  people  had 
not  seen  the  light,  but  we  asked  for  another  chance.  They 
gave  it  to  us.  We  went  back  to  our  brother  molders  and  began 
the  missionary  work  all  over  again.  We  did  our  best,  but  to  no 
avail ;  the  convention  of  1902  turned  us  down  coldly,  greatly 
and  keenly  to  our  regret  and  embarrassment. 

The  two  organizations  then  faced  a  very  delicate  decision. 
Here  was  a  piece  of  legislation  that  was  vital  to  the  industry' 
and  to  the  nation  and  the  leaders  were  unanimous  about  it, 
but  the  employes  could  not  be  made  to  understand.  The  ques- 
tion was  whether  to  wait  still  longer  or  terminate  the  treaty 
and  settle  the  apprentice  problem  in  a  stand-up-and-knock-down 
fight  between  the  two  organizations.  Such  a  fight  would  mean 
strikes  and  lockouts  and  the  training  of  a  new  crop  of  non- 
union   molders   who   would    make   up   a   sufficient   labor   supply 


46  SELECTED  ARTICLES 

and  would  eventually  join  the  unions.  Thus  the  men  stood  to 
lose  their  point  in  the  long  run.  On  the  other  hand  the  em- 
ployers would  lose  time  and  money  and  some  of  them  would 
be  ruined.  On  the  whole,  though,  the  foundrymen  were  in- 
clined to  think  that  a  fight  was  the  lesser  of  two  evils.  Never- 
theless, we  prevailed  on  them  to  wait  another  year.  This  time 
we  carried  the  referendum  and  the  apprentice  question  was 
satisfactorily  adjusted.  Doesn't  that  all  have  a  fine  old-time, 
town-meeting  tang?  Doesn't  it  appeal  to  the  instinctive  democ- 
racy of  every  American? 

The  apprentice  affair  made  us  molders  look  like  the  bone- 
heads  and  obstructionists  of  this  stove-making  republic,  but 
in  another  case  the  tables  were  reversed.  About  the  same  time 
along  came  some  inventors  and  promoters  with  a  molding  ma- 
chine which,  they  said,  would  reduce  the  number  of  men  re- 
quired and  that  none  need  be  skilled,  thus  putting  the  union  out 
of  business  for  good.  This  idea  appealed  to  many  of  the 
foundrymen  in  more  ways  than  one.  We  didn't  believe  the 
machine  was  wholly  practicable,  but  the  employers  thought  we 
were  merely  taking  a  moss-back  stand  against  the  march  of 
improvement  and  they  finally  installed  the  machines.  The 
foundrymen  believed  that  with  the  machines  they  had  attained 
an  improved  industrial  position  which  they  must  retain  at  all 
costs.  The  molders  believed  that  the  effect  of  the  machines 
would  be  to  deprive  their  families  of  bread  unless  they  con- 
trolled their  operation.  The  argument  was  not  conducted  in 
the  best  of  spirit  and  there  was  much  heat  and  friction.  It  was 
evident,  however,  that  stoves  would  continue  to  be  manufac- 
tured and  that  stove  castings  would  continue  to  be  made.  For 
several  years  the  questions  raised  by  the  advent  of  the  machines 
were  an  open  sore.  In  the  end,  however,  patient  application  of 
the  democratic  method,  established  the  sound  basic  principle 
that  whatever  the  molding  machines  might  accomplish  in  in- 
creased output  and  otherwise  the  molder's  total  earnings  must 
not  be  reduced,  and  that  his  standard  of  living  should  not  be 
lowered  because  of  improved  methods  of  production.  It  took 
two  or  three  years  more  to  get  the  principle  into  satisfactory 
practical  application.  Since  then  there  has  been  no  further  con- 
troversy over  the  machines  though  to  an  appreciable  extent  they 
have  replaced  hand  labor.  In  this  dispute  the  molders  were 
right  and  it  took  time  to  educate  the  employers. 


PROBLEMS   OF   LABOR  47 

WHAT   DOES    LABOR   WANT?' 

Amid  all  these  stirrings  and  outbreaks  of  industrial  trouble, 
what  is  it  that  Labor  really  wants?  How  many  genuinely 
puzzled  persons  keep  putting  this  question  to  themselves  and 
one  another,  finding  no  satisfactory  reply?  It  is  pretty  evident 
that  these  squabbles  about  meal-times,  victimization,  or  even  the 
exact  increase  of  wages  or  shortening  of  hours,  do  not  ade- 
quately represent  the  size  and  nature  of  the  new  demands  that 
have  been  gathering  in  war-time  and  now  clamor  for  satisfac- 
tion. On  the  other  hand,  we  think  it  incorrect  to  assume  that 
the  extreme  doctrines  of  Socialism  or  Syndicalism,  embodying 
nothing  less  than  the  destruction  of  "the  capitalist  system,"  with 
the  conscious  "class-war"  as  its  weapon,  are  the  animating  mo- 
tives of  any  large  section  of  the  discontented  workers  or  even 
of  their  leaders,  save  perhaps  in  one  or  two  restricted  areas  of 
disturbance.  Labor  is  not  as  yet  demanding  to  "take  over"  and 
operate  itself  and  for  itself  the  mines,  the  factories,  the  rail- 
ways, and  the  workshops,  and  to  portion  out  the  landed  property 
along  the  lines  of  Bolshevism.  Conservative  speakers  and  jour- 
nals that  apply  this  measure  to  the  present  discontent  do  a  grave 
disservice. 

But  because  the  great  body  of  workers  have  not  clearly 
formulated  the  nature  and  dimensions  of  their  demands,  it  does 
not  follow  that  they  do  not  know  what  they  are  "after."  Their 
knowledge  may  not  be  complete  or  systematic,  but  it  is  not  ob- 
scure. The  experience  of  war-time  has  done  not  a  little  to 
clarify  their  vision  of  a  better  life  for  Labor  and  to  suggest 
effective,  though  not  always  desirable,  ways  of  attaining  it. 
They  want  a  secure  standard  of  comfort  on  a  considerably 
higher  level  than  the  pre-war  scale — better  food,  houses,  cloth- 
ing, and  amusement,  with  a  steady  money  wage  large  enough 
to  buy  them.  They  want  more  free  time  for  home-life,  rest, 
recreation.  Their  minds  grasp  the  full  meaning  of  that  elusive 
word,  education.  They  want  a  juster,  freer  State.  And  they 
want  a  "big  say"  as  to  the  conditions  under  which  they  work, 
a  release  from  domineering  and  over-pressure  in  the  workshops, 
and  a  good  security  against  arbitrary  cuts  of  wage-rates  and 
unemployment.  Many  of  their  new  local  leaders  would  doubt- 
less  describe    such   a    statement   of   Labor   claims    as   quite    in- 

*  The   Nation    (England).     February    i,    1919.     p.    505-6- 


48  SELECTED   ARTICLES 

adequate.  But  we  believe  that  an  industrial  order  which  should 
secure  these  reforms  for  the  workers  would  suffice  to  win  in- 
dustrial peace. 

Now,  can  any  decent-minded  intelligent  person  assert  that 
any  one  of  these  objects  is  undesirable?  With  the  exception 
of  the  dwindling  majority  of  the  master-class  who  still  cherish 
the  desire  to  "keep  the  working  classes  in  their  place  and  not 
to  pamper  them,"  there  will  be  a  consensus  of  opinion  in  favor 
of  this  better  life  for  the  masses.  It  is  clearly  desirable,  but  is  it 
economically  attainable?  Can  we  produce  enough  wealth  to  fur- 
nish forth  this  higher  standard  of  living,  and  can  we  afford  this 
longer  leisure  at  a  time  when  the  destructive  power  of  war  has 
so  impaired  the  stocks  and  fabric  of  industry  as  to  impose  upon 
us  for  some  years  to  come  the  added  work  of  reparation,  in 
order  that  we  may  start  where  we  left  off  in  1914?  How,  under 
.such  circumstances,  can  the  workers  have  more  wealth  and 
more  leisure?  Many  labor  men  have  an  easy  solution  of  the 
problem  in  their  view  of  capitalistic  exploitation.  Ample  funds 
for  making  everybody  comfortable  are  absorbed  in  the  un- 
earned incomes  of  the  rich.  There  is  in  this  theory  a  quite 
sufficient  element  of  truth  to  make  it  a  tlioroughly  convincing 
doctrine  to  those  who  possess  "the  will  to  believe."  But  it 
will  not  convince  those  who  face  the  facts  and  figures  of  the 
capitalist  system.  Our  nation  has  never  yet  produced  nearly 
enough  wealth  and  leisure  to  make  everybody  comfortable,  even 
if  it  were  properly  distributed. 

More  wealth  must  be  produced,  atid  it  must  be  more 
equitably  distributed.  We  cannot  get  for  all  the  life  we  admit 
to  be  desirable  on  any  other  terms.  Hitherto  there  hasn't  been 
enough  wealth  to  go  round,  and  carry  comfort  and  content  to 
every  home.  Unfortunately  this  statement  is  not  merely  un- 
palatable to  the  organized  workers;  it  is  a  dangerous  irritant. 
It  suggests  to  men  who  are  asking  for  more  relief  from  the 
strain  of  industry  that  they  must  work  harder  and  bring  about, 
as  past  experience  seems  to  attest,  a  glut  of  goods  which  will 
lower  prices,  imperil  wage  rates,  and  cause  unemployment. 
Now  we  hold  that  it  is  technically  possible  to  get  the  needed 
increase  of  wealth  and  leisure  for  the  workers,  together  with 
the  improved  status  and  security  of  employment,  without  a 
policy  of  speeding  up  or  any  risk  of  congesting  the  market.  An 
improved  equipment  of  machinery,  the  effective  utilization  of 
electricity  and   other  sources   of   industrial   power    for   nianufac- 


PROBLEMS    OF    LABOR  ^0 

ture  and  transport,  better  business  organization,  the  elimina- 
tion of  wasteful  forms  of  competition,  the  application  of  known 
improvements  and  economies,  would  enable  us  to  double  or 
treble  our  production  of  material  wealth,  if  we  were  willing  to 
applj'  them. 

What  blocks  the  way?  The  poisoned  atmosphere  of  mutual 
suspicion  and  the  increased  belief  in  force  as  a  remedy  which 
war  leaves  as  a  natural  legacy.  The  enforced  national  unity 
of  war-time  is  everywhere  dissolving  into  factious  quarrelling, 
nourished  on  innumerable  stories  of  waste,  jobbery,  and  cor- 
ruption. Great  fortunes  have  undoubtedly  been  built  up  by 
scandalous  profiteering.  The  growth  of  powerful  combinations 
places  an  almost  despotic  power  in  the  hands  of  capitalist  in- 
terests. These  things  have  been  accomplished  by  the  conni- 
vance, and  in  many  instances  hy  the  aid,  of  the  State,  which 
during  the  war  has  entrusted  the  exceptional  powers  it  acquired 
to  the  absolute  discretion  of  the  most  successful  profiteers  in 
the  several  trades.  To  crown  all,  there  is  the  exhibition  of  the 
new  Government,  hastily  foisted  on  the  bewildered  nation,  in 
which  nearly  all  the  levers  of  business  control  are  in  the  hands 
of  great  capitalists  whose  past  records  and  reputations  do  not 
suggest  a  disinterested  public  attitude  to  Labof  and  the  con- 
suming public.  Hence  an  attitude  of  irritability,  and  suspicion 
of  all  persons  in  authority,  landlords,  employers,  officials,  and 
Labor  leaders.  For  one  of  the  gravest  symptoms  of  our  pres- 
ent troubles  is  the  weakened  or  lost  control  of  the  "authorized" 
trade-union  officials  over  the  movements  of  the  local  groups  of 
workmen,  and  a  growing  distrust  in  the  machinery  for  settling 
grievances  as  they  arise  in  the  staple  industries. 

But  employers  have  no  small  share  of  the  responsibility  for 
this  unrest.  Many  of  them  have  learnt  neither  humanity  nor 
discretion  from  the  difficult  times  through  which  the  nation 
has  been  passing.  In  common  with  a  large  section  of  "society," 
they  are  wont  to  stigmatize  as  "slackers,"  "rebels,"  and  "Bol- 
sheviks" the  workmen  who,  rising  to  a  new  sense  of  their  social 
and  human  value,  are  seeking  to  import  that  new  sense  into  a 
reformed  industrial  system.  In  every  industrial  area  these  stub- 
born, masterful  employers  are  impediments  to  industrial  peace, 
and  defend  their  control  of  their  businesses  in  the  same  spirit 
and  by  the  same  weapons  as  the  more  revolutionary  leaders  of 
the  men.  Everywhere  these  supporters  of  conscription,  protec- 
tion, monopoly,  and  industrial  absolutism  are  contributing  to  the 


50  SELECTED   ARTICLES 

peril  of  the  post-war  situation,  girding  now  against  "agitation," 
now  against  taxation  of  war  profits,  and  contriving  to  use  Gov- 
ernment to  keep  up  prices. 

The  perils  are  imminent  and  growing.  Can  the  great  basic 
principles  of  democracy  and  self-determination,  which  are  being 
invoked  as  peace-makers  in  the  larger  area  of  international  re- 
lations, bring  no  healing  influence  upon  this  internecine  strife? 
Is  it  impossible  that  these  suspicions  and  conflicting  interests 
should  "get  together"  and  establish  instruments  of  concerted 
counsels  and  government  for  industry?  If  the  Whitley  Coun- 
cils are  not  perfect  instruments  for  self-government  in  such 
trades  as  engineering,  could  they  not  be  taken  as  foundations 
of  a  better  order  within  the  trade  and  the  workshop?  Is  not 
Mr.  Clynes's  bolder  proposal  of  an  Industrial  Parliament,  to 
which  large  issues  of  labor  and  other  economic  policy  might  be 
entrusted  for  discussion  and  even  legislation  by  trade  represen- 
tatives, worthy  of  early  and  close  consideration?  For  the  root 
of  the  trouble  is  that  men  turn  to  selfish,  shortsighted,  and 
forceful  methods  because  they  see  no  obviously  just  and  rea- 
sonable way  of  redressing  real  grievances  or  attaining  what 
seem  fair  demands.  No  deus  ex  machina,  no  compulsory  arbi- 
tration by  Boafd  of  Trade  officials,  can  impose  industrial  peace 
upon  the  warring  elements.  We  do  indeed  favor  a  large  inter- 
vention of  Government  in  the  industrial  order.  We  think,  for 
example,  that  the  time  has  come  to  fix  an  eight  hours'  day  as 
the  normal  standard  of  work.  And  we  believe  also  in  a  real 
experiment  in  representative  government,  such  as  we  under- 
stand Mr.  Clynes  to  propose.  To  such  a  body  the  conflicting 
claims,  not  only  of  Capital  and  Labor  in  the  several  trades,  but 
of  the  several  trades  in  their  "pulls"  upon  the  national  dividend 
of  wealth,  leisure  and  other  economic  goods,  can  be  referred. 
It  might  sanction  industrial  regulations  for  all  matters  in  which 
there  is  a  real  community  of  interests,  and  initiate  the  new 
era  of  social  peace  without  which  no  League  of  Nations  can  do 
more  than  shift  the  areas  and  change  the  methods  of  human 
conflict.  Co-ordination  is  perhaps  not  a  particularly  attractive 
term.  But  it  marks  a  first  essential  to  any  real  solution  of 
these  tangled  problems.  So  long  as  each  department  of  Gov- 
ernment, each  trade  and  each  business  interest,  finds  in  the 
assertion  of  its  own  separate  "will  to  power"  the  only  way  of 
getting  what  it  wants,  the  nation  will  flounder  on  in  a  deepening 
morass  of  economic  trouble. 


COST  OF  LIVING 


COST    OF    LIVING    AND    WAGES' 

How  far  and  on  what  principles  should  wages  be  adjusted 
to  the  cost  of  living?  The  question  has  been  before  the  Amer- 
ican people  for  some  time,  and  now  more  than  ever  calls  for  a 
clear  and  discriminating  answer.  It  is  by  no  means  simple,  and 
Ihe  answer  cannot  be  given  offhand  or  in  unqualified  terms. 

Two  cases  are  to  be  distinguished.  First,  there  may  be 
changes  in  prices  due  to  general  causes,  influencing  all  commo- 
dities in  much  the  same  way,  and  showing  a  steady  trend  over 
a  considerable  period.  Second,  changes  which  are  due  to  special 
causes  (such  as  seasonal  fluctuations  of  crops).  These  are 
most  conspicuously  seen  in  farm  and  garden  produce  and  are 
not  so  steady,  but  are  liable  to  be  checked  or  accelerated  v/ithin 
a  comparatively  brief  period. 

First — the  case  of  general  changes  in  prices,  such  as  all  the 
world  has  experienced  since  the  beginning  of  the  war.  There 
had  been  some  general  advance  for  many  years  before,  ever 
since  the  beginnig  of  the  century.  Prices  went  up  from  1900  to 
1914;  but  they  went  up  more,  and  more  rapidly,  after  1914.  In 
the  United  States  the  advance  has  been  particularly  great  since 
1917,  when  we  entered  the  war.  There  has  been  inflation  every- 
where; prices  have  risen  the  world  over. 

Whenever  such  a  general  rise  has  taken  place  in  the  past, 
wages  and  like  incomes  have  failed  to  rise  as  quickly.  Wages 
have  lagged  behind  prices,  and  wage  receivers  have  been  worse 
off  during  the  period  of  lag.  All  of  them  do  not  suffer  equally 
under  such  conditions.  Some  even  gain ;  the  wages  of  some  go 
up  for  a  time  more  than  prices,  not  less.  This  is  likely  to  hap- 
pen in  the  industries  which  are  specially  subject  to  govern- 
ment demand.  But  wages  in  general  do  not  usually  advance  as 
fast   as   prices   during  periods   of   inflation.     The   advance   has 

1  By  Frank  W.  Taussig,  Professor  of  Economic*,  Harvard  University. 
Collier's.     64:13.      September  37,    19 19. 


52  SELFXTED   ARTICLES 

always  been  slowest  with  the  salary  incomes  received  by  per- 
sons who  have  a  considerable  fixity  of  tenure,  such  as  teachers, 
public  employees,  corporate  and  government  officials.  If  the 
higher  scale  of  prices  lasts  a  long  time,  wages  and  salaries 
everywhere  eventually  are  adjusted  to  it.  But  often  there  is  a 
reaction  before  the  adjustment  is  completed.  Prices  go  down 
again  or  shift  in  irregular  ways ;  and  hence  it  may  happen  that 
the  wrongs  are  never  put  right. 

Wrongs  they  are.  Wages  should  be  adjusted  promptly  and 
fully  to  changes  in  general  prices.  The  failure  to  do  so  is  one 
of  the  greatest  evils  of  inflation.  True,  when  there  are  violent 
price  fluctuations,  this  adjustment  often  is  very  difficult  to 
make.  Even  when  the  fluctuations  are  more  moderate,  it  takes 
time  to  mark  and  measure  them  and  act  accordingly.  But  the 
principle  is  clear :  everything  that  is  possible  should  be  done  to 
prevent  the  lag.  There  should  be  accurate  and  up-to-date  statis- 
tics of  wages  and  prices,  well-organized  labor  boards,  quick 
and  just  action. 

The  Cause  of  "Fluctuations" 

One  of  the  good  sides  of  modern  development  is  that  this 
principle  is  not  only  accepted  universally  but  is  acted  on  more 
completely  than  at  any  previous  time.  Governments  and  em- 
ployers have  gone  farther  toward  its  application  than  ever  be- 
fore ;  the  wrong  has  been  probably  less  than  ever  before.  The 
improvement  has  been  due  partly  to  awakened  social  responsi- 
bility, partly  to  the  activity  of  organized  labor.  There  has  been 
great  mitigation  of  this  kind  of  injustice,  even  though  the  right- 
ing is  not  complete. 

The  second  case  is  not  so  easily  disposed  of.  Suppose  there 
is  no  change  in  general  prices,  but  an  advance  in  some  things 
largely  consumed.  When  people  speak  of  the  "cost  of  living" 
they  have  in  mind  chiefly  the  prices  of  the  food  staples.  Flour 
and  bread,  meat,  vegetables,  and  fruits,  are  subject  to  fluctua- 
tions of  their  own.  The  purchasing  power  of  money  wages  ap- 
plied to  food  may  become  less,  even  though  in  general  money 
buys  as  much  as  before.  The  same  discrepancy  between  money 
wages  and  food  prices  occurs  when  all  prices  go  up,  and  wages 
go  up  correspondingly,  but  food  goes  up  even  more.  And  the 
reverse  situation  may  arise  and  does  arise :  food  prices  going 
down,  when  general  prices  are  stationary;  or,  when  other  prices 


PROBLEMS   OF    LABOR  S3 

are  declining,  food  prices  going  down  less.  What  then?  Should 
wages  move  up  and  down  in  prompt  and  complete  accord  with 
each  and  every  change  in  this  important  but  not  all-inclusive 
element  in  the  cost  of  living? 

The  cause  of  fluctuations  in  food  prices  is  usually  to  be 
found  in  crop  changes.  When  the  wheat  crop  is  large  the 
world  over,  bread  and  flour  become  cheaper;  when  it  is  scant, 
they  become  dearer.  When  our  corn  crop  is  good,  bacon,  ham, 
pork,  and  beef  fall  in  price ;  when  it  is  poor,  they  rise.  Now 
it  is  evident  that  no  adjustment  of  wages  can  smooth  over 
these  fluctuations.  When  the  wheat  crop  is  short,  there  is  so 
much  to  be  had  and  no  more.  The  world  cannot  then  con- 
sume the  same  amount  as  during  a  full  season,  for  the  simple 
reason  that  there  is  so  much  less  to  go  around.  To  raise  wages 
by  paying  more  money  to  every  workman,  and  (as  in  justice 
should  of  course  be  done)  to  every  other  person,  would  mean 
simply  still  higher  prices  of  the  food,  not  more  food.  It  is 
quite  impracticable  to  put  wages  up  and  down  according  to 
seasonal  shifts  in  food  prices.  Possibly  supplies  can  be  ad- 
justed, through  carry-over  from  season  to  season;  but  this,  so 
far  as  it  can  be  done  (there  are  limits),  serves  to  obviate  the 
very  occasion  for  trying  to  adjust  wages. 

Feeding  the  World 

There  is  another  sort  of  case  in  which  no  fair  adjustment 
can  be  obtained.  This  is  in  times  of  erratic  and  sudden 
changes.  Such  changes  may  be  due  to  speculative  manipulation, 
or  to  the  plain  fact  of  the  world  being  in  a  turmoil.  The  two 
causes  often  are  at  work  at  the  same  time;  speculation  is  rife 
precisely  when  the  world  is  upset.  Then  the  ups  and  downs  of 
all  prices  are  unsteady  and  unpredictable,  and  the  prices  of  sea- 
sonal products  are  most  of  all  unsteady.  Any  adjustments 
made  under  such  conditions  to  to-day's  prices  are  likely  to 
prove  maladjustments  to-morrow.  Of  course  these  are  evil 
conditions.  Every  effort  should  be  made  to  prevent  them  from 
arising,  and  to  put  an  end  to  them  when  they  do  arise. 

What  now  are  present  conditions? 

So  far  as  the  general  and  sustained  rise  in  prices  goes,  the 
answer  is  simple.  Of  course  wages  should  go  up  to  the  extent 
that  prices  have  gone  up.  There  are  statistical  difiiculties— just 
in  what  way  measure  the  changes  in  prices?  what  places  and 


54  SELECTED   ARTICLES 

what  occupations  should  be  taken  as  typical  and  standard  for 
wages?  and  so  on.  Yet  between  fair-minded  men  there  is  noth- 
ing hard  to  straighten  out. 

But  when  it  comes  to  the  prices  of  food  products,  and  in 
general  the  matter  of  abnormal  and  freaky  prices,  our  present 
conditions  present  knotty  problems.  Consider  the  food  situa- 
tion as  it  stands.  There  is  no  crop  shortage  in  the  United 
States.  Our  wheat  crop  is  well  above  the  average,  though  not 
so  superabundant  as  was  expected  at  the  beginning  of  the  year. 
The  corn  crop  is  about  average,  but  is  excellent  in  quality.  Our 
meat  products  are  as  plentiful  as  usual.  Yet  wheat  sells  at  the 
high  price  which  the  Government  has  guaranteed  to  the  farm- 
ers. It  sold  for  even  more  during  the  spring;  and  the  Grain 
Corporation  (the  Government's  agent)  does  not  find  it  easy 
to  keep  the  price  down  to  the  guaranteed  figure.  Corn,  which 
is  quite  unregulated,  tends  to  soar;  and  so  do  meats,  in 
sympathy. 

All  these  high  prices  could  not  be  maintained  in  face  of  the 
adequate  domestic  supplies  if  it  were  not  for  the  foreign  de- 
mand. Though  there  is  no  domestic  shortage,  there  is  a  world 
shortage.  We  are  helping  to  feed  the  world,  and  the  world  is 
bidding  for  our  food.  And  we  are  not  only  helping  to  feed 
the  world,  but  are  helping  the  world  to  bid  against  us  for  our 
own  products.  We  are  lending  to  foreigners — financing  their 
purchases.  We  do  so  not  merely  because  some  individuals 
among  us  find  it  profitable,  but  because  the  country  as  a  whole 
approves. 

The  Government  itself  appropriated  large  sums  to  help  feed 
the  foreigners.  Private  loans  now  continue  to  finance  the  pur- 
chase. Through  it  all  we  ourselves,  as  a  body,  have  used  our 
own  funds  to  enable  the  world  to  bid  for  and  buy  our  own 
food  supplies. 

Go  Slow! 

Perhaps  we  are  making  a  mistake.  Perhaps  we  should  keep 
our  food  for  ourselves,  or  so  much  of  it  as  to  maintain  food 
prices  here  at  a  lower  level.  The  way  to  do  so  would  be  to 
stop  or  restrict  exports  by  an  embargo.  The  proposal  has  been 
made,  but  never  pressed.  There  is  substantial  agreement  that 
we  should  continue  to  contribute  to  feeding  tlie  world  so  long 
as  the  acute  needs  persist.     Partly  we  all  feel  that  this  is  right; 


PROBLEMS   OF    LABOR  55 

partly  the  agricultural  producers  want  it  in  their  own  interest. 
Certain  it  is  that  our  prices  are  kept  up  not  only  by  our  own 
purchases  but  by  the  foreign  purchases  which  for  the  time  being 
we  are  backing. 

Such  a  situation  is  unstable.  It  cannot  endure  indefinitely. 
The  world  will  come  back  sooner  or  later  to  a  more  natural 
state.  Crops  abroad  will  be  sown  and  reaped  about  as  before. 
Government  guarantees  will  run  out.  The  speculative  flurries 
started  by  the  abnormal  conditions  will  also  calm  down — not  all 
speculative  or  market  fluctuations,  but  those  due  to  the  uncer- 
tainties and  irregularities  of  the  moment.  How  soon  the  shift 
to  more  normal  conditions  will  come,  no  one  can  say.  Nor  can 
anyone  say  by  what  process  it  will  come;  whether  by  a  sudden 
overturn,  as  is  quite  possible,  or  by  a  gradual  transition.  All 
we  can  be  sure  of  is  that  the  world  now  is  out  of  joint. 

So  long  as  the  instability  and  uncertainty  last,  it  would  seem 
the  part  of  wisdom  to  go  slow  in  fitting  wages  to  this  quarter's 
or  that  quarter's  food  prices,  or  to  a  cost  of  living  in  which 
present  prices  play  a  dominant  part.  The  smoother  and  more 
sustained  movement  of  general  prices  can  be  followed  in 
adjustments  of  wages.  I  believe  too  that  special  care  should 
be  taken  for  maintaining  or  raising  the  money  wages  of  the 
poorest  groups  of  workers — those  to  whom  most  of  all  the  price 
of  food  is  a  crucial  matter. 

For  the  rest  we  must  face  the  fact  that  the  world  is  going 
through  a  period  both  of  economic  shortage  and  of  social  fer- 
ment. Inflation  is  probably  at  the  top  notch.  This  unstable  and 
tnicertain  situation  may  continue  for  some  time;  perhaps  for 
months,  in  my  judgment  hardly  for  another  year.  But  until 
the  present  crop  season  is  over  we  had  better  go  slow  and 
make  no  changes  likely  to  be  of  enduring  character.  Nothing 
that  is  expected  to  last  should  be  built  on  a  shifting  foundation. 

All  of  the  above  refers  to  one  phase  only  of  wages  prob- 
lems; namely,  the  way  in  which  money  wages  should  be  adjusted 
to  changes  in  prices  and  in  the  cost  of  living.  Back  of  all  de- 
bate on  this  matter  lies  the  controversy  at  large  between  em- 
ployees and  employers.  Labor  wants  enough  in  any  event  to 
ofFset  higher  prices.  But  it  wants  still  more,  if  more  can  be 
got.  Not  only  does  it  want  more  so  far  as  is  possible  under 
existing  industrial  organization :  it  is  ready  to  urge  radical 
changes  in  society  if  radical  changes  are  necessary  in  order  to 


56  SELECTED   ARTICLES 

secure  more.  Here  are  fundamental  questions  that  will  remain 
with  us  long  after  the  special  monetary  questions  of  the  pres- 
ent are  forgotten.  They  are  questions  that  must  be  faced 
squarely;  and  they  cannot  be  settled  by  any  statistical  devices 
or  arbitration  machinery.  They  must  not  be  confused  with  the 
special  problem  of  the  moment — the  interrelation  of  prices,  cost 
of  living,  and  steadiness  in  the  purchasing  power  of  money 
wages. 


MEASUREMENT    OF    THE    COST    OF    I.IXIXC; 
AND  WAGES' 

The  great  upheaval  in  prices  during  the  past  two  or  three 
years  has  forced  into  the  spotlight  of  public  interest  the  stand- 
ard of  living  as  a  basis  of  wage  settlement.  The  cost  of  living 
has  risen  quite  suddenly  and  most  dramatically,  and  unless 
wages  rose  witli  the  rise  in  prices  the  net  result  was  an  actual 
lowering  of  the  standard  of  living.  For  this  reason  the  stand- 
ard of  living  has  become  in  a  great  many  cases  the  basis  for 
setting  wages. 

Thus  the  Shipbuilding  Labor  Adjustment  Board  has  on 
three  occasions  raised  wages  to  the  extent  that  the  cost  of  liv- 
ing has  risen,  having  done  so  on  each  occasion  only  after  an 
extensive  survey  and  measurement  of  the  increased  cost  of 
living  has  been  made.  The  National  War  Labor  Board  in 
nearly  every  case  that  has  come  before  it  for  settlement  has 
considered  evidence  and  testimony  on  the  increased  cost  of  liv- 
ing. In  perhaps  half  of  the  cases  they  have  made  a  settlement 
of  wages  directly  on  the  basis  of  the  increased  cost  of  living, 
and  in  many  of  the  cases  specific  provision  has  been  made  for 
the  future  readjustment  of  wages  on  the  basis  of  changes  in 
the  cost  of  living.  The  Railroad  Wage  Commission  based  a 
recent  raise  in  wages  on  the  results  of  a  special  nation-wide 
survey  into  the  extent  that  the  cost  of  living  had  risen.  A 
number  of  private  employers  have  raised  wages  after  having 
had  special  studies  made  to  determine  the  extent  of  the  in- 
crease in  cost  of  living.  A  few  companies'  have  n.ade  provision 
for   periodic    (in   some   cases   monthly)    increases   of   wages,    in 

*By  W.  F.  Ogburn.  Annals  of  the  American  Academy.  81:110-22. 
January,    1919- 


PROBLEMS   OF    LABOR  57 

accordance  with  the  percentage  increases  in  the  cost  of  living. 
Some  of  these  companies  are  the  Bankers'  Trust  Co.  of  New 
York  City,  The  Index  Visible  (Inc.)  of  New  Haven,  Conn., 
the  Oneida  Community,  the  Kelly-How-Thompson  Co.  of  Du- 
luth,  Minn.,  the  George  Worthington  Co.,  and  the  Printz-Bieder- 
man  Co.  of  Cleveland. 

During  the  period  of  reconstruction  following  the  war,  if 
prices  should  continue  to  rise,  there  will  be  further  adjustments 
of  wages  on  the  basis  of  rising  prices.  If,  on  the  other  hand, 
prices  fall,  it  is  certainly  very  desirable  that  wages  should  not 
fall  more  than  prices.  In  either  event  the  changing  cost  of  liv- 
ing will  be  a  prime  factor  in  determining  wages,  and  during 
the  period  of  reconstruction,  social  and  industrial  conditions  are 
likely  to  be  such  as  to  need  the  guiding  hand  of  a  strong  pub- 
lic policy.  Such  a  public  policy  must  surely  consider  the  stand- 
ard of  living  in  any  directing  or  control  it  may  employ  on  the 
course  of  wages. 

This  enhanced  importance  of  cost  of  living  as  a  factor  in 
wages  occasioned  by  the  war  and  reconstruction,  makes  it  quite 
desirable  to  set  forth  not  only  some  of  the  facts  of  recent  changes 
in  the  standard  of  living,  but  also  some  of  the  concepts  involved 
which  are  not  wholly  clear  to  the  general  observer.  Further- 
more, as  the  setting  of  wages  by  standards  of  living  depends  upon 
the  accurate  determination  of  the  standard  of  living,  it  is  also 
desirable  to  show  something  of  the  technique  that  has  recently 
been  evolved  for  measuring  this  complex  phenomenon.  For  only 
by  such  knowledge  can  the  issue  thus  raised  by  demobilization 
be  met. 

In  June  of  1918  the  cost  of  living  had  risen  around  55  per 
cent  over  the  pre-war  period.  I  have  spoken  of  June  of  1918 
as  a  poiiit  of  measurement,  because  a  number  of  studies  were  in- 
dependently made  of  the  increase  in  the  cost  of  living  up  to  ap- 
proximately this  time,  and  thus  there  was  not  only  abundant 
evidence  on  the  increase  in  the  cost  of  living  but  the  results 
were  in  considerable  conformity  as  to  the  exact  percentage  of 
increase.  These  studies  were  made  by  the  U.S.  Bureau  of  Labor 
Statistics,  by  the  Shipbuilding  Labor  Adjustment  Board,  by  the 
Railroad  Wage  Commission,  by  the  National  Industrial  Con- 
ference Board  and  by  the  National  War  Labor  Board.  Since 
June,  1918,  the  measurement  of  cost  of  living  has  been  carried 
on  by  the  U.S.  Bureau  of  Labor  Statistics  in  various  localities. 


58  SELECTED   ARTICLES 

These  results  of  the  bureau  are  not  yet  fully  tabulated,  but  upon 
the  basis  of  data  collected  in  fifteen  shipbuilding  centers  for 
August,  1918,  the  average  increase  up  to  that  time  over  1914 
was  65  per  cent.^ 

These  figures  are  not  based  on  wholesale  prices,  which  fluct- 
uate somewhat  more  widely  than  do  retail  prices,  nor  on  food 
alone,  which  is  only  about  40  per  cent  of  the  budget,  but  are 
based  upon  food,  rent,  fuel  and  light,  clothing  and  sundries. 
The  increased  cost  of  living  is  found  by  combining  the  increased 
cost  of  each  of  these  five  classes  of  expenditure,  after  the  in- 
creased cost  of  each  class  has  been  weighted  according  to  its 
relative  importance  in  the  budget. 

The  increase  in  the  price  of  food  is  found  by  taking  an 
average  of  the  increase  (or  decrease)  in  some  thirty  or  forty 
articles  of  food,  each  weighted  according  to  the  amount  spent 
on  it.  For  a  particular  locality,  prices  of  each  article  are  taken 
from  eight  or  ten  stores.  Food  in  October,  1918,  has  increased 
75  per  cent  over  the  average  price  for  1914-1915. 

The  increase  in  rent  for  a  town  or  city  is  found  by  taking  a 
sample  of  from  500  to  2,000  houses  or  apartments,  located  pro- 
portionally in  all  the  districts  where  workingmen  live  and  find- 
ing the  average  change  in  rent  of  these  dwellings  over  the 
period  studied.  The  increase  in  rent  has  not  been  so  rapid  nor 
so  great  as  the  increase  in  most  other  items  of  the  budget.  The 
changes  in  rent  vary  widely  from  locality  to  locality.  Thus  in 
Detroit  from  December,  1914,  to  March,  1918,  rent  increased  38 
per  cent,  while  in  Jacksonville  from  December,  1914,  to  August, 
1918,  rents  fell  one  per  cent. 

The  problem  in  measuring  the  increase  in  fuel  and  light  lies 
chiefly  in  weighting  the  changes  in  price  according  to  the  extent 
that  each  type  of  fuel  and  light  is  used  by  the  community.  In 
general  the  increase  in  coal  and  wood  has  been  nearly  the  same 
in  most  areas,  while  changes  in  rates  for  gas  and  electricity 
vary  somewhat  by  locality.  Gas  and  electricity  have  usually  not 
changed  so  much  in  price,  increasing  by  no  great  percentage  and 
in  rare  instances  falling  slightly.  From  December,  1914,  to 
August,  1918,  fuel  and  light  have  increased  from  25  per  cent 
to  45  per  cent,  in  most  cases  being  near  the  latter  figure. 

Clothing  has  increased  to  the  greatest  extent  of  any  general 

*  The  increase  in  cost  of  living  for  New  York  City  up  to  December 
1918    (over   December    1914)    has  been  computed  and  is   75   per  cent. 


PROBLEMS    OF    LABOR  59 

class  of  expenditure,  ranging  from  125  per  cent  to  70  per  cent 
over  the  pre-war  period  to  August,  1918,  in  general  the  increase 
being  around  95  to  100  per  cent.  The  increase  in  the  price  of 
clothing  is  measured  by  getting  the  prices  on  about  seventy-five 
articles  of  clothing  used  by  various  members  of  the  family  from 
eight  or  ten  stores  in  the  locality,  in  each  store  getting  the  prices 
if  possible  on  four  or  five  leading  sellers  representative  of  each 
article  of  clothing.  The  increases  over  the  period  studied  for 
each  of  these  articles  of  clothing  are  then  weighted  according 
to  the  amount  spent  for  them  b}^  the  average  family,  and  the 
average  increase  is  then  found. 

Sundries  include  expenditures  for  insurance,  organizations, 
furniture  and  furnishings,  education,  amusement,  sickness,  car- 
fare and  various  miscellaneous  expenditures.  The  increase  in 
sundries  is  most  difficult  to  get  because  of  the  difficulty  of  get- 
ting proper  weights  and  enough  large  samples  for  each  locality. 
Alost  of  the  studies  made  have  not  measured  the  increase  in 
sundries  adequately.  From  the  few  careful  studies  made  of 
changes  in  prices  of  sundries,  it  seems  they  increase  at  about 
the  same  percentage  as  the  total  of  the  items  of  the  budget. 

Some  idea  of  the  variation  in  the  increased  cost  of  living  in 
different  localities  can  be  had  by  noting  the  following  figures 
for  the  increased  cost  of  living  in  various  shipbuilding  centers 
from  December,  1914,  to  August,  1918,  made  by  the  U.S.  Bureau 
of  Labor  Statistics:  Baltimore,  80  per  cent;  Norfolk,  75  per 
cent ;  Bath,  Me.,  68  per  cent ;  Philadelphia,  67  per  cent ;  Ports- 
mouth, N.H.,  67  per  cent;  Chicago,  65  per  cent;  Boston,  65 
per  cent;  Jacksonville,  Fla.,  63  per  cent;  Portland,  Me.,  63 
per  cent;  Toledo,  Ohio,  63  per  cent;  New  York,  62  per  cent; 
Superior  Wis.,  60  per  cent;  Beaumont,  Tex.,  60  per  cent;  Sa- 
vannah, Ga.,  58  per  cent;  Mobile,  Ala.,  56  per  cent.  Perhaps 
more  variation  is  shown  by  these  figures  than  really  exists, 
because  the  month  of  August  is  an  unsatisfactory  month  to  get 
prices  in,  as  in  some  cities  the  autumn  prices  are  quoted  and 
in  others  the  prices  of  a  former  season  are  quoted.  Thus  when 
the  month  of  January,  1918,  was  taken  as  the  point  to  which  to 
measure  the  increased  cost  of  living  from  December,  1914,  the 
variation  was  only  from  40  per  cent  to  48  per  cent  for  fifteen 
shipbuilding  centers.  In  shipbuilding  centers  and  localities 
doing  large  amounts  of  war  work,  perhaps  the  increase  is 
slightly  greater  than  in  other  cities,  because  in  many  of  these 


6o  SELECTED  ARTICLES 

centers  of  war  industries,  rent  has  increased  more  than  in  other 
places.  Of  course  most  cities  have  been  doing  some  war  work 
and  this  difference  in  rent  must  not  be  unduly  pressed.  The 
rise  in  food,  clothing,  fuel  and  certain  sundries  seems  to  be 
general  irrespective  of  locality. 

In  this  manner,  then,  tlie  increased  cost  of  living  has  been 
determined  for  a  definite  period  and  for  particular  localities  for 
the  purpose  of  increasing  wages  by  the  same  percentage  of  in- 
crease that  the  cost  of  living  has  shown,  thus  enabling  the  same 
standard  of  living  to  be  maintained.  But  in  a  number  of  cases 
this  process  of  raising  wages  has  been  unsatisfactory  because  it 
is  claimed  that  the  standard  of  living  in  the  pre-war  period 
which  was  used  as  the  basis  for  computing  an  increase  was  too 
low.  And  certainly  a  number  of  American  wage-earners  were 
endeavoring  to  live  on  less  than  a  minimum  of  subsistence  in 
the  pre-war  period.  The  problem  then  becomes  one  of  de- 
termining what  is  a  proper  standard  of  living.  To  raise  wages 
according  to  the  increase  in  the  cost  of  living  is  in  some  cases 
not  an  adequate  method  of  setting  wages,  and  in  these  cases 
wages  can  be  settled  satisfactorily  only  by  considering  the 
standard  of  living  as  well  as  the  increased  cost  of  living. 

The  problem  in  such  an  event  then  is  to  determine  the  proper 
standard  of  living.  Up  to  the  present  time  attempts  have  been 
made  to  measure  three  diflferent  levels  of  living. 

The  first  of  these  is  what  might  be  called  the  poverty  level 
and  for  which  there  have  been  drawn  a  number  of  budgets, 
principally  by  various  charity  organizations  and  philanthropic 
societies.  Families  living  at  this  level  receive  charity  in  the 
form  of  gifts  or  free  medical  service  or  in  other  ways.  Or  if 
they  do  not  do  this  they  attempt  to  live  on  a  level  so  low  as  to 
weaken  them  eventually  to  such  an  extent  that  disease  in- 
evitably overtakes  them. 

The  level  above  the  poverty  line  is  called  the  minimum-of- 
subsistence  level.  This  level  varies  of  course  from  country  to 
country.  It  is  spoken  of  here  as  the  American  standard,  it  being 
realized  that  it  varies  somewhat  in  different  parts  of  an  area  so 
large  as  the  United  States.  The  minimum  of  subsistence  will 
also  change  over  a  period  of  time,  irrespective  of  the  level  of 
prices.  What  was  the  minimum  of  subsistence  a  number  of 
years  ago  is  certainly  not  a  minimum  of  subsistence  now.  Quite 
a  number  of  budgets  have  been   set  for  this  level  in  previous 


PROBLEMS    OF    LABOR  6i 

years.  The  study  made  by  Dr.  Cliapin  in  New  York  in  1907 
set  such  a  level.  Another  was  the  budget  of  the  New  York 
Factory  Investigating  Commission  in  1914.  Such  a  standard 
of  living  corresponds  approximately  with  that  of  common  or 
unskilled  labor,  and  is  what  is  generally  referred  to  as  a  living 
wage. 

There  has  also  been  a  tendency  to  recognize  still  another 
level  which  has  been  called  the  minimum  comfort  level,  which 
is  of  a  plane  somewhat  higher  than  that  of  the  minimum  of 
subsistence.  Thus  in  the  autumn  of  1917  in  Seattle  the  arbitra- 
tion board  in  a  strike  of  the  street  railway  employes  accepted 
a  budget  of  $i,50C  for  a  family  of  five.  The  settlement  was 
made  on  the  basis  of  a  budget,  drawn  after  considerable  study, 
and  called  the  minimum  comfort  budget. 

The  poverty  budget  at  the  charity  level  is  chiefly  of  con- 
cern to  charity  organizations,  and  it  is  hoped  that  less  and  less 
attention  will  have  to  be  paid  to  this  type  of  budget.  On  the 
other  hand,  the  budget  at  the  level  of  the  minimum  of  subsis- 
tence is  of  the  utmost  importance  because  it  determines  the  line 
Ijelow  which  American  families  ought  not  to  be  allowed  under 
any  circumstances  to  sink.  In  some  localities,  sufficient  careful 
study  has  been  made  of  the  minimum  of  subsistence  by  various 
students  to  lend  considerable  confidence  to  the  accuracy  of 
their  results.  Thus,  in  1907  in  New  York  City,  Dr.  Chapin 
after  a  very  careful  study  said,  "An  income  under  $800  is  not 
enough  to  permit  the  maintenance  of  a  normal  standard.  An 
income  of  $900  or  over  probably  permits  the  maintenance  of  a 
normal  standard,  at  least  as  far  as  the  physical  man  is  con- 
cerned." For  1914  in  New  York  City  the  New  York  Factory 
Investigating  Commission  set  a  minimum-of-subsistence  budget 
at  $876.  And  in  1915  the  Bureau  of  Personal  Service  of  the 
Board  of  Estimate  and  Apportionment  of  New  York  City  made 
a  minimum  budget  estimate  for  an  unskilled  laborer's  family 
in  New  York  of  $845.  These  budgets  therefore  approximate 
the  minimum  of  subsistence  for  New  York  City  before  the 
present  great  increase  in  the  cost  of  living,  which  was  first 
markedly  noticeable  in  the  late  summer  of  1915.  If  the  mini- 
mum of  subsistence  in  pre-war  times  was  between  $850  and  $900 
for  a  family  of  five,  what  is  it  now  since  the  great  upheaval  in 
prices? 

A  good  deal  of  investigation  has  been  made  on  the  prob- 


62  SELECTED  ARTICLES 

lem  of  what  is  a  minimum  of  subsistence  in  America  today 
by  the  cost-of-living  department  of  the  National  War  Labor 
Board.  In  the  early  summer  of  1918  this  level  was  described 
by  a  budget  drawn  up  item  by  item.  This  budget  was  based 
largely  on  data  collected  by  the  U.S.  Bureau  of  Labor  Statis- 
tics, and  was  worked  up  in  consultation  with  various  experts. 
This  work  showed  that  for  a  family  of  five  to  maintain  the 
minimum  of  subsistence  in  a  large  eastern  city  in  June  of  1918 
an  income  of  $1,380  was  necessary.  Approximately  this  esti- 
mate was  confirmed  by  a  totally  different  method  of  approach, 
namely,  by  applying  the  percentages  of  increase  in  cost  of  liv- 
ing to  well-recognized  budgets  worked  out  in  former  periods. 
The  increase  in  food,  in  rent,  in  fuel  and  light,  in  clothing  and 
in  sundries  was  added  to  the  estimates  in  former  budgets,  and 
so  brought  up  to  date.  Thus,  Dr.  Chapin's  budget  for  New 
York  City  in  1907  would  cost  in  June,  1918,  $1,390.  The  budget 
of  the  New  York  Factory  Investigating  Commission  would  cost 
$1,360  and  that  of  the  New  York  Board  of  Estimate  would 
cost  $1,320.  It  is  possible  to  use  still  another  method  of  esti- 
mating the  minimum  of  subsistence.  In  minimum-of-subsistence 
budgets  food  usually  costs  about  44  per  cent  of  the  total,  so  if 
we  know  the  cost  of  food  we  can  estimate  the  total  budget. 
The  U.S.  Bureau  of  Labor  Statistics  collected  600  dietaries  in 
the  New  York  Shipbuilding  district,  which  cost  on  the  aver- 
age $607  a  year,  the  families  averaging  3.6  equivalent  adult 
males.  Upon  analysis  this  average  dietary  based  on  600  cases 
yielded  only  3,155  calories  per  adult  per  day,  not  allowing  any- 
thing for  waste.  So  if  we  consider  $615  as  the  cost  of  food 
per  year  for  a  family  of  3.4  equivalent  adult  males,  we  get 
a  total  budget  of  $1,390.  It  seems  fairly  clear  then  that  in 
June,  1918,  the  minimum  of  subsistence  for  a  family  of  five 
living  in  a  large  eastern  city  was  from  $i,350-$i,400.  If  the 
cost  of  living  since  June,  1918,  to  the  present  time  (November, 
1918)  has  risen  10  per  cent,  then  the  minimum  of  subsistence 
at  the  present  time  costs  about  $1,500  for  a  family  of  five  in  a 
large  eastern  city. 

Not  very  much  attention  has  been  given  to  standards  of  liv- 
ing above  the  subsistence  level  for  the  purpose  of  setting 
wages.  But  the  department  of  the  National  War  Labor  Board 
on  the  cost  of  living  drew  up  for  the  consideration  of  the 
board  a  budget  above  the  subsistence  level  which  was  called  the 


PROBLEMS    OF    LABOR  63 

minimum  comfort  level.  In  June,  1918,  the  cost  of  this  budget 
was  $1,760  per  year  for  a  family  of  five.  These  facts  will  give 
the  reader  fairly  good  ideas  of  various  levels  of  the  standard 
of  living  since  the  great  change  in  prices. 

The  importance  of  the  standard  of  living  as  a  factor  in 
determining  wages  during  reconstruction  will  probably  occasion 
a  good  many  attempts  to  define  and  measure  the  standard  of 
living  in  various  industries  and  in  various  parts  of  the  country. 
Such  a  probability  makes  it  desirable  here  to  develop  some- 
what the  concepts  involved  in  the  standard  of  living  and  the 
method  of  determining  proper  standards. 

The  general  reader  is  not  at  all  times  fully  aware  of  the 
following  concepts.  A  standard-of -living  budget  for  wage- 
earners  is  thought  of  by  some,  and  erroneously  so,  as  fitting 
a  particular  individual  family  rather  than  an  average  family. 
But  budgets  for  the  purpose  of  wage  adjustment  are  drawn 
not  for  a  single  family  but  for  a  group  of  families.  Hence  the 
items  of  a  budget  should  be  average  items.  Thus  in  a  partic- 
ular community  the  men  in  some  families  will  ride  on  the 
street  car  twice  a  day  for  every  work  day  in  a  month.  Men 
in  other  families  will  not  ride  to  and  from  work  at  all.  So 
an  average  budget  for  such  a  community  might  put  down 
expenditures  of  the  man  for  car  fare  for  thirty  car  rides  a 
month,  although  no  man  in  any  family  would  ride  exactly  this 
number  of  times  a  month,  no  more  and  no  less.  It  is  rather 
an  average  expenditure  of  those  who  ride  to  work  and  those 
who  do  not.  Similarly,  the  number  of  suits  of  clothes  bought 
per  year  might  be  expressed  in  fractions.  Items  of  expendi- 
ture are  therefore  generalized.  It  follows  from  the  above 
analysis  that  items  of  expenditure  should  not  be  set  at  the 
lowest  possible  figure  for  an  individual  but  for  the  group  as  a 
whole.  Thus  some  men  may  need  only  2,500  calories  a  day 
while  some  will  need  6,000  calories,  the  average  for  a  man  at 
moderately  hard  work  being  probably  3,500. 

Another  conception  necessary  for  a  clear  understanding  of 
setting  wages  by  constructed  budgets  is  that  budget  estimates 
must  not  be  ideal.  It  cannot  be  assumed  for  instance  that  a 
housewife  has  the  expert  training  of  a  domestic  science  ex- 
pert. Nor  should  budgets  be  constructed  without  an  allow- 
ance for  tobacco,  when  we  know  that  it  will  be  impossible 
practically   for   a   community   to   live   according   to   such    ideal 


64  SELECTED   ARTICLES 

rules  of  expenditure.  On  the  other  hand  it  seems  questionable 
whether  such  constructed  budgets  should  conform  absolutely 
to  practice.  The  expenditure  in  actual  practice  will  be  a  func- 
tion of  the  income  received  and  as  the  income  is  what  we 
want  to  determine,  there  is  danger  of  getting  in  a  circle.  For 
instance,  families  of  a  group  of  workmen  may  spend  only  $i8 
a  year  for  sickness ;  whereas  they  should  spend  more,  as  we 
know  from  data  gathered  in  sickness  surveys  that  they  need  to 
get  more  medical  attention  than  $i8  will  buy.  Budget  estimates, 
however,  should  conform   fairly  closely  to  practice. 

Budgets  are  usually  constructed  for  a  family  of  husband, 
wife  and  three  children.  This  custom  is  justified  on  the  grounds 
that  public  policy  should  encourage  early  marriage  and  that 
to  prevent  the  population  from  decreasing,  at  least  two  chil- 
dren should  be  reared  to  parenthood. 

Formerly  budget  estimates  included  chiefly  food,  rent,  fuel 
and  light,  and  clothing;  other  items  were  neglected  to  a  great 
extent.  Food,  shelter  and  warmth  were  thought  of  as  the 
minimum  of  subsistence.  We  now  know  that  food,  shelter  and 
warmth  are  not  the  only  necessary  needs.  And  so  considerable 
attention  is  being  paid  to  other  items  of  expenditure  in  budget 
making.  For  instance  if  we  find  large  numbers  of  families  who 
do  not  get  enough  food  and  who  do  not  get  medical  attention 
when  sick,  yet  frequently  attend  moving  picture  shows,  the 
proper  conclusion  would  seem  to  be  that  recreation  is  a  neces- 
sary need  as  truly  as  food,  and  we  know  that  in  American 
life  recreation  costs  some  money.  Hence  expenditures  for 
recreation  should  he  written  into  a  minimum-of-subsistencc 
budget.     And  so  it  is  with  sundry  items. 

To  some  persons  not  familiar  with  budgetary  studies,  tlie  de- 
termination of  the  level  of  subsistence  seems  a  matter  of  opinion 
rather  than  of  science.  But  there  are  many  scientific  approaches 
to  the  problem  and  various  ways  of  eliminating  the  personal 
bias.  This  method  cannot  be  gone  into  at  length  here  but  some 
of  the  devices  used  for  locating  the  point  of  subsistence  may 
be  set  forth  briefly. 

The  food  requirement  can  be  found  by  subjecting  to  food 
analysis  a  number  of  actual  dietaries.  The  cost  of  that  dietary 
actually  used  which  furnishes  the  requisite  number  of  calories, 
grams  of  protein  and  the  necessary  chemical  constituents  will 
be   set  as   the   minimum    amount   of    expenditure    for    food    for 


PROBLEMS   OF    LABOR  65 

subsistence.  Tlie  amount  for  rent  can  be  estimated  by  select- 
ing a  standard  house  of,  say,  four  or  five  rooms  Avitli  bath  and 
finding  the  average  rental  for  various  locahties  in  the  commun- 
ity. Or  if  a  number  of  budgets  have  been  collected,  the  mini- 
mum rent  may  be  determined  at  a  point  where  overcrowding 
ceases  to  exist,  having  determined  some  standard  for  over- 
crowding, as  for  instance  one  or  one  and  one-half  persons  to 
a  room.  Perhaps  a  fair  method  of  determining  the  fuel  and ' 
light  necessary  is  to  compute  for  various  t\'pes  of  heating  ap- 
paratus in  houses  of  a  certain  size  the  amount  of  fuel  and  light 
used  by  families  that  are  known  to  be  just  above  the  poverty 
level  but  clearly  so.  The  minimum,  of  subsistence  in  clothing 
is  perhaps  most  difficult  to  determine.  The  usual  procedure  is 
to  adopt  a  certain  estimate  of  clothing  upon  which  there  has 
been  a  fair  amount  of  agreement,  such  as  one  overcoat  every 
three  years,  one  hat  a  year,  one  cap  a  year,  one  suit  of  clothes 
a  year  and  so  on.  At  this  time  of  changing  prices  it  is  difficult 
to  express  these  units  in  price  terms  which  will  show  agree- 
ment. If  a  number  of  family  schedules  have  been  collected,  it 
is  possible  to  locate  a  point  where  the  expenditure  of  clothes 
for  the  wife  is  say  75  per  cent  of  the  expenditure  for  the  cloth- 
ing of  the  husband,  or  some  such  point  agreed  upon.  It  is 
known  for  instance  that  when  the  clothing  allowance  is  too  low, 
the  expenditure  for  the  wife's  clothing  is  only  a  small  per- 
centage of  the  expenditure  for  the  husband's  clothing,  and  that 
when  the  allowance  for  clothes  is  bountiful  that  the  expenditure 
on  the  wife's  clothing  equals  or  exceeds  that  for  the  husband. 
There  is  no  general  rule  for  determining  the  amount  necessary 
for  sundry  expenditures.  The  amount  for  car  fare  is  broken 
into  three  classes,  that  necessary  for  the  husband  to  spend  in 
going  to  and  from  work,  that  necessary  for  children  to  go  to 
and  from  school,  and  other  car  fare ;  in  this  way  the  amount 
can  best  be  approximated.  The  amount  for  sickness  can  be 
estimated  from  a  study  of  the  average  number  of  days  of  sick- 
ness a  year.  There  are  also  various  ways  of  getting  expert 
testimony  on  the  amount  of  insurance  necessary.  And  so  one 
can  set  a  minimum  standard  throughout  the  items  of  the  budget. 
Considering  the  budget  as  a  whole,  there  are  various  guide 
posts  that  readily  tell  when  the  poverty  line  is  passed.  Usually, 
gifts  of  clothing  are  indicative  of  poverty.  So  also,  the  method 
of  obtaining  fuel,  known  as  "gathering  fuel"  is  often  an  index 


66  SELECTED   ARTICLES 

of  poverty.  The  point  also  at  which  the  family  ceased  to  be  in 
debt  is  significant.  Thus  in  the  District  of  Columbia  in  1916 
families  with  incomes  lower  than  $1,150  were  on  the  average  in 
debt.  Usually  all  these  various  tests  converge  upon  a  particular 
income  and  this  is  spoken  of  as  the  minimum-of-subsistence 
standard. 

Formerl}',  budgets  determining  standards  of  living  were  ex- 
pressed only  in  prices.  Now,  however,  at  a  time  when  prices 
are  changing  very  rapidl}^  a  budget  expressed  in  prices  is  not 
very  intelligible  and  will  be  less  so  the  further  back  the  period 
which  it  represents.  The  need  is  therefore  quite  manifest  for 
a  budget  expressed  in  quantities  as  well  as  in  prices,  and  the 
items  should  be  described  also  as  fully  as  possible.  It  is  greatly 
to  be  hoped  that  future  budget  studies  will  be  in  terms  of  quan- 
tities adequately  described.  Furthermore,  the  more  fully  a  bud- 
get is  described,  the  more  accurate  is  the  measurement. 

Enough  has  been  indicated  to  show  what  sort  of  measure- 
ment is  necessary  if  the  standard  of  living  is  to  be  used  in  wage 
settlements.  A  budget  study  of  a  particular  community  is  quite 
a  difficult  undertaking,  involves  considerable  technicalitj'  and  is 
quite  expensive.  In  a  country  as  large  as  the  United  States  and 
possessing  so  many  localities  where  wages  may  be  adjusted  on 
the  basis  of  the  cost  of  living,  it  is  an  impossible  undertaking  to 
make  a  budgetary  study  in  every  community.  It  would  seem 
that  such  a  difficulty  could  be  met  by  estimating  the  cost  of  liv- 
ing in  a  city  for  which  w^e  have  no  budgetary  study  and  by 
finding  the  price  differential  from  a  city  for  which  we  have 
budgetary  studies.  In  the  wage  adjustments  of  the  National 
War  Labor  Board  during  the  war  a  very  great  need  was  felt 
for  some  quick  method  of  determining  the  differential  in  cost 
of  living  between  one  city  and  another.  For  instance,  the  wage 
may  have  been  set  in  Philadelphia  for  street  car  employes  on 
the  basis  of  the  cost  of  living.  It  is  also  desirable  to  set  wages 
in  New  Orleans  for  street  car  men,  but  there  is  no  cost  of  living 
study  in  New  Orleans.  It  would  be  much  simpler  and  easier  to 
set  the  wages  in  New  Orleans  if  such  a  differential  were  known. 

But  so  far  there  seems  to  be  no  quick  way  of  telling  how 
much  less  it  costs  to  live  in  New  Orleans  than  in  Philadelphia, 
except  by  full  budgetary  studies.  It  would  seem  that  the  way 
to  measure  this  differential  would  be  to  get  the  prices  of  an 
extensive  list  of  commodities  such  as  food,  clothing,  rent,  etc., 


PROBLEMS   OF   LABOR  67 

in  Philadelphia  and  in  New  Orleans,  and  the  average  difference 
in  prices  will  be  the  differential  in  living  costs  between  the  two 
cities.  The  difference  between  the  prices  of  the  identical  com- 
modities between  the  two  places  would  be  very  slight  indeed. 
But  if  determined  it  would  only  mean  the  difference  in  prices 
and  not  the  difference  in  the  cost  of  living  because  of  differences 
in  habits  of  living.  For  instance,  the  dietaries  in  New  Orleans 
are  quite  different  from  those  in  Philadelphia.  The  same 
articles  of  food  would  cost  on  the  average  about  the  same  in 
the  two  places;  but  a  dietary  yielding  just  as  many  calories  in 
New  Orleans  as  a  different  dietary  would  yield  in  Philadelphia 
apparently  will  cost  considerably  less.  Similarly  so  simple  a 
differential  to  measure  as  rents  may  be  nevertheless  difficult  to 
determine,  the  type  and  size  of  house  in  New  Orleans  being 
quite  dift'erent  from  that  in  Philadelphia.  There  are  climatic 
differences  which  affect  standards  in  consumption  of  fuel.  Also 
common  brands  of  clothing  between  the  two  places  are  very 
few.  So  it  is  very  difficult  to  estimate  differences  in  cost  of  liv- 
ing between  two  places  without  making  full  budgetary  studies. 
As  the  difference  in  cost  of  living  between  any  two  places  is 
in  most  cases  small,  the  error  in  rough  approximations  is  too 
great.  Probably  the  best  way  to  handle  this  problem  is  to  have 
very  careful  budgetary  studies  made  in  representative  localities 
in  representative  districts,  as  for  instance  in  small  towns,  large 
towns  and  large  cities  in  the  various  geographical  areas,  and 
to  use  the  differential  thus  carefully  determined  as  representa- 
tive of  other  differentials.  This  the  U.S.  Bureau  of  Labor  Sta- 
tistics is  engaged  in  doing  at  the  present  time. 

This  point  is  extremely  important  in  forming  any  really  na- 
tional policy  on  wages.  At  the  present  time  there  are  con- 
siderable differences  in  levels  of  wages  in  different  parts  of  the 
country.  Some  observers  justif}-  these  local  or  territorial 
differences  by  saying  that  the  cost  of  living  is  quite  different 
in  these  areas.  Others  on  the  other  hand  reply  that  the  dif- 
ferences in  the  cost  of  living  in  the  various  areas  are  different 
because  wages  determine  the  cost  of  living  and  that  a  uniformity 
in  wages  would  bring  a  uniformity  in  living  costs.  They  say 
that  the  identical  standard  of  living  prices  in  the  various  terri- 
torial districts  would  be  very  nearly  the  same  in  cost  in  all 
localities.  Obviously  such  a  problem  as  this  should  be  solved 
before   a   satisfactory   national   policy   in    regard   to   wages   can 


68  SELECTED   ARTICLES 

be  declared.  The  Railroad  Wage  Commission  and  the  Ship- 
building Labor  Adjustment  Commission,  both  handling  wages 
on  a  national  scale,  have  been  confronted  with  this  problem. 
In  general  their  findings  have  been  that  the  differences  in  the 
cost  of  living  in  various  parts  of  the  country  are  not  so  great 
as  are  popularly  supposed. 

In  conclusion,  then,  it  must  be  recognized  that  there  are 
various  determinants  of  wages,  supply  and  demand,  productivity 
and  the  standards  of  living;  and  these  are  variously  interrelated. 
In  a  period  of  laissez-faire  conditions,  supply  and  demand  oper- 
ate particularly  strongly.  But  with  the  development  of  social 
control  and  the  growth  of  social  justice,  the  standard  of  living 
plays  a  large  part  in  the  determination  of  wages.  This  has  been 
true  particularly  during  the  war  because  of  the  increase  in 
prices  and  the  necessity  of  a  high  degree  of  social  regulation 
and  control.  During  the  period  of  demobilization  and  recon- 
struction, the  standard  of  living  should  be  equally  as  important 
in  national  consideration.  For  the  gains  of  democracy,  whether 
it  be  political  or  economic  in  the  last  analysis,  certainly  come 
down  to  one  important  base,  the  standard  of  living.  The  stand- 
ard of  living  must  also  be  very  seriously  considered  in  formu- 
lating any  national  policy  in  regard  to  wages.  The  importance 
of  the  standard  of  living  in  the  adjustment  of  wages  then  has 
been  the  reason  for  setting  forth  in  this  paper  the  definition  of 
important  concepts  involved,  something  of  the  technique  of 
measurement  recently  evolved  and  also  a  few  of  the  more  im- 
portant facts  in  regard  to  the  extent  in  the  rise  of  the  cost  of 
living  and  the  present  levels  in  the  standard  of  living. 


THE   INDEX    NUMBER   WAGE  ^ 

A  Scientific  Method  for  Adjusting  Wages  to  the  Cost  of  Living 

There  are  but  few  who  understand  that  the  science  of  politi- 
cal economy  is  comparatively  young.  Adam  Smith's  classical 
work  upon  the  "Wealth  of  Nations"  was  not  published  until 
1776,  and  prior  to  that  time  commercial  enterprise  generally 
went  hand  in  hand  with  military  aggression.  Trade,  or  at  least 
international  trade,  was  predatory  in  its  character,  and  the  hope 

'  By  Theodore  H.   Price.     Outlook.      121:742-3.     August   30.    iy'9- 


PROBLEMS   OF    LABOR  69 

of  finding  peoples  and  countries  that  they  might  exploit  and 
pillage  was  the  chief  inspiration  of  the  explorers  of  the  fifteenth, 
sixteenth,  and  seventeenth  centuries.  As  long  as  commercial 
supremacy  was  a  question  of  physical  prowess,  a  knowledge  of 
economic  law  was  not  essential  in  its  attainment. 

It  is  therefore  chronologically  appropriate  that  the  birth  of 
economic  science  as  we  know  it  to-day  should  have  been  con- 
temporaneous with  the  French  Revolution  and  the  establish- 
ment of  the  American  Republic,  which  were  the  result  of  the 
first  really  successful  efforts  that  society  had  made  to  substitute 
the  law  of  right  for  that  of  might. 

In  the  days  of  Adam  Smith  and  for  fifty  years  thereafter 
there  was,  however,  but  little  international  trade  and  practically 
none  of  the  international  community  of  financial  interest  that 
exists  to-day.  Great  Britain's  imports  and  exports  in  1750  were 
valued  at  an  aggregate  of  only   £17,400,000. 

In  1915  they  were  worth  £  i,403.555.o65,  or  eighty  times  the 
total  of  1750,  while  the  population  in  the  interval  had  only  mul- 
tipHed  itself  by  seven,  having  been  6,517,035  in  1750,  as  against 
46,089,249  in  1914. 

In  the  year  1800  and  previously  loan  and  deposit  banking  as 
it  exists  to-day  was  practically  unknown.  Most  transactions 
were  settled  by  the  payment  of  gold  or  silver,  and  the  supply  of 
these  metals  must  have  been  altogether  inadequate,  for,  accord- 
ing to  Soetbeer,  their  production  during  the  forty  years  end- 
ing with  1799  averaged  less  than  $45,000,000  annually,  as  against 
a  present  average  of  about  $700,000,000  a  j-ear. 

It  was  not  until  labor-saving  machinery  had  made  produc- 
tion on  a  large  scale  possible,  and  steam  provided  a  prompt  and 
reliable  means  of  transportation,  that  the  development  of  mod- 
ern commerce  commenced,  and  it  was  only  when  distance  and 
time  were  annihilated  by  cable  and  telegraph  that  prices  through- 
out the  world  began  to  fluctuate  in  unison  and  the  law  of  supply 
and  demand  became  so  "delocalized"  in  its  operation  that  gen- 
eralizations in  regard  to  it  were  safe. 

All  of  which  is  by  way  of  explaining  the  meagerness  of  the 
historical  data  that  are  at  the  disposal  of  the  economist  to-day. 

There  are  military  and  political  histories  of  the  nineteenth 
century  without  number,  but  an  adequate  history  of  the  world's 
trade  and  finance  in  that  period  remains  to  be  written,  although 
it  is  the  first  century  in  which  there  was  really  any  trade  and 


70  SELECTED   ARTICLES 

finance  that  could  properly  be  described  as  international  or 
world-embracing. 

Even  now  the  records  that  are  essential  to  a  thorough  knowl- 
edge of  the  subject  are  obscure  or  unavailable  in  many  coun- 
tries, and  the  differences  of  language,  currencies,  weights,  and 
measures  are  so  numerous  that  accurate  and  intelligent  com- 
parisons of  prices  are  exceedingly  difficult. 

It  is  therefore  manifest  that  a  precise  determination  of  what 
is  called  the  decreased  purchasing  power  of  money  is  impossible, 
but  in  what  has  come  to  be  known  as  the  "index  number"  we 
have  the  first  scientific  effort  that  has  been  made  toward  this 
end,  and  as  such  it  is  worthy  of  the  careful  study  of  those  who 
look  forward  to  the  time  when  wages  and  prices  shall  be  intelli- 
gently regulated  in  conformity  with  economic  law  and  the  costs 
and  wastes  of  strikes  and  deceptive  bargaining  shall  be  avoided. 

The  index  number  is  the  sum  or  average  of  the  prices  of  the 
commodities  that  are  essential  to  civilized  existence.  To  be  of 
indicial  value  the  prices  of  which  it  is  representative  must  be 
marshaled  on  successive  dates,  and  a  comparison  between  the 
total  or  average  of  the  figures  thus  obtained  will  show  the  aver- 
age percentages  of  advance  or  decline  in  the  prices  of  the  com- 
modities included  during  the  period  under  consideration. 

Inasmuch,  however,  as  the  wants  of  civilized  man  include  a 
great  many  different  things  which  are  consumed  in  different 
proportions,  it  will  readily  be  seen  that  an  index  number  to  be 
accurately  reflective  of  the  cost  of  living  must  be  not  only  an 
average  of  the  prices  of  a  large  number  of  articles,  but  a 
"weighted"  average,  in  the  computation  of  which  the  price  of 
each  article  or  group  of  articles  is  multiplied  by  a  factor  which 
about  equals  the  ratio  that  the  consumption  of  the  article  or 
group  bears  to  the  total  normal  consumption. 

Thus  the  index  number  compiled  by  R.  G.  Dun  &  Co.  and 
known  as  "Dun's  Number"  is  used  in  this  discussion  because  it 
includes  the  prices  of  some  three  hundred  products,  so  arranged 
that  foods  count  for  about  fifty  per  cent  of  the  total,  textiles 
for  eighteen  per  cent,  minerals  for  sixteen  per  cent,  and  other 
commodities  for  sixteen  per  cent.  While  this  division  is  of 
course  arbitrary,  it  is  probably  an  approximation  to  the  fact, 
and  the  number  of  commodities  included  is  certainly  larger  than 
the  number  used  in  the  composition  of  any  other  index  number 
of  which  I  have  knowledge.     Among  the  other  authorities  pub- 


PROBLEMS   OF    LABOR  71 

lishing  index  numbers  are  "Bradstreet's,"  Babson,  and  the 
United  States  Bureau  of  Labor  Statistics  in  the  United  States, 
the  "Statist"  and  the  "Economist"  in  England,  and  the  Depart- 
ment of  Labor  in  Canada.  Index  numbers  are  also  officially 
or  unofficially  compiled  in  Australia,  Austria-Hungary,  Belgium, 
Denmark,  France,  Germany,  India,  Italy,  Japan,  Netherlands, 
New  Zealand,  Norwaj',  Russia,  and  Spain. 

"The  Making  and  Using  of  Index  Numbers"  is  the  title  of 
an  exceedingly  interesting  pamphlet  of  325  pages  prepared  by 
Professor  Wesley  C.  Mitchell  and  published  as  Bulletin  No.  173 
of  the  Bureau  of  Labor  Statistics  at  Washington. 

It  is  to  be  obtained  upon  application  to  the  Department  of 
Labor,  and  I  recommend  it  heartily  to  those  who  may  desire 
to  inform  themselves  in  regard  to  the  history  and  technique  of 
a  statistical  formulary  that  is  likely  to  have  great  weight  and  be 
of  great  practical  assistance  in  solving  many  of  the  economic 
problems  of  the  future. 

Already  the  "Index  Number  Wage"  has  been  adopted  in 
several  American  industrial  establishments.  Those  that  I  hap- 
pen to  have  heard  definitely  of  are  the  Oneida  Community,  of 
Oneida,  New  York;  the  Kelley-Howe-Thomson  Company 
(hardware),  of  Duluth,  Alinnesota;  the  George  Worthington 
Company  (hardware),  of  Cleveland,  Ohio;  the  Printz  Bieder- 
man  Company  (clothing),  also  of  Cleveland;  the  Index  Visible 
(Inc.),  of  New  Haven,  Connecticut;  the  Alishawaka  Woolen 
Alanufacturing  Company,  of  Mishawaka,  Indiana;  and  the 
Union  Bleaching  and  Finishing  Company  of  Greenville,  South 
Carolina.  The  details  of  the  plans  followed  in  each  case  differ 
slightly,  but  generally  they  take  as  a  base  the  wages  paid  on  a 
certain  date  upon  which  it  is  assumed  that  earnings  and  the 
cost  of  living  bore  an  equitable  relation  to  each  other.  On 
subsequent  pay  days  the  employees  have  received  two  envelopes, 
one  containing  the  "base  wage,"  and  another,  sometimes  called 
the  "H.  C.  L.  Envelope,"  which  contains  a  percentage  of  the 
base  wage  equal  to  the  percentage  of  advance  in  commodity 
prices  over  those  current  at  the  time  when  the  base  wage  was 
established,  as  shown  by  the  most  recently  published  index 
number. 

A  variant  of  this  method  has  been  applied  in  the  case  of 
the  wages  paid  to  the  employees  of  the  county  of  Cuyahoga, 
Ohio,  in  which  county  Cleveland  is  situated. 


72  SELECTED   ARTICF-ES 

I  believe  that  the  general  adoption  of  an  Index  Numlier 
Wage  will  provide  a  permanent  solution  for  many  of  the  prob- 
lems that  must  confront  both  the  employer  and  employee  as  the 
purchasing  power  of  money  changes.  Such  a  wage,  automatically 
rising  and  falling  as  the  cost  of  living  fluctuates,  would  to  a 
great  extent  obviate  strikes,  lessen  discontent,  and  reconcile  tho 
wage-earner  to  lower  wages  when  prices  decline,  because  ho 
would  realize  that  when  they  went  up  again  his  pay  would  be 
increased  without  any  demand  on  his  part.  The  Index  Number 
Wage  would  also  lead  the  employee  to  become  a  student  of  eco- 
nomics and  practice  an  intelligence  in  buying  that  would  make 
extortion  or  profiteering  on  the  part  of  the  retail  merchants  with 
whom  he  dealt  extremely  difficult.  •  The  head  of  one  of  the  es- 
tablishments that  has  adopted  the  Index  Number  Wage  tells  us 
that  his  employees  admit  that  their  money  "goes  much  further" 
than  it  used  to,  because  their  "H.  C.  L.  Envelopes"  contain  a 
slip  giving  the  wholesale  prices  of  most  things  that  they  need, 
and  by  comparing  it  with  the  retail  prices  demanded  of  them 
they  can  see  whether  they  are  being  overcharged  or  not. 

But  it  is  in  our  greatest  industry,  namely,  transportation,  that 
the  adoption  of  an  Index  Number  W^agc  seems  to  promise  the 
most  desirable  results. 

It  would  promote  not  only  a  feeling  of  contentment  among 
the  employees,  because  they  would  have  a  consciousness  of 
equitable  treatment,  but  it  would  also  bring  the  public  to  a  better 
understanding  of  the  problem  that  the  railway  managers  have 
had  to  face  latterly  and  reconcile  the  patrons  of  the  roads,  be 
they  travelers,  shippers,  or  consumers,  to  the  advance  in  rates 
recently  established  or  any  further  advance  that  may  be  neces- 
sary. 

As  we  look  back  over  the  records  since  1896,  we  are  driven 
to  the  conclusion  that  railroading  is  the  only  business  in  the 
United  States  in  which  the  charge  for  the  service  rendered  or 
the  article  sold  docs  not  bear  some  relation  to  the  cost  of  pro- 
duction. 

In  the  case  of  transportation,  the  cost  of  production  is  in 
the  last  analysis  the  cost  of  the  labor  employed,  for  whether  this 
cost  of  labor  is  reflected  directly  in  the  wages  paid,  or  indirectly 
in  the  cost  of  the  materials  (fuel,  oil,  steel,  etc.)  purchased, 
makes  little  or  no  difference.  If  coal  costs  more,  it  is  because 
the  miners  are  better  paid.    If  steel  rails  are  higher,  the  advance 


PROBLEMS    OF    LABOR  -jz 

reflects  the  higher  wages  paid  for  their  fabrication.  If  oil  has 
increased  in  price,  the  enhancement  is  due  to  the  greater  cost 
of  the  human  energy  required  for  its  production ;  and  so  it  is 
all  along  the  line.  The  cost  of  providing  transportation  is 
almost  entirely  made  up  of  the  cost  of  labor.  There  may  be 
some  who  will  take  exception  to  this  statement  and  claim  that 
since  the  interest  paid  on  the  capital  inve.'^ted  or  borrowed  does 
not  go  into  the  wage-earner's  pocket  it  is  not  accurate  to  assert 
that  this  element  of  cost  fluctuates  in  relation  to  the  cost  of 
labor  or  the  cost  of  living,  which  have  latterly  become  terms 
that  mean  nearly  the  same  thing. 

This  might  be  true,  were  it  not  for  the  fact  that  all  parts 
of  a  railway  are  constantly  wearing  out  and  have  constantly 
to  be  renewed.  The  amount  of  the  original  investment  and 
the  rate  of  interest  thereon  may  be  static,  but  the  material  or 
labor  used  in  necessary  replacement  as  the  rails  or  bridges  first 
purchased  wear  out  represents  human  energy  that  must  be  paid 
for  at  the  market  rates.  It  is  therefore  clear  that,  except  as 
to  the  profits  paid  out  in  dividends  or  carried  to  surplus  account 
(which  aggregate  hardly  more  than  ten  per  cent  of  the  entire 
gross  revenue),  the  railway  business  is  simply  one  of  buying 
and  selling  Ininian  energy,  either  physical  or  menial. 

In  the  light  of  this  statement  it  would  be  natural  to  expect 
that  railway  rates,  railway  wages,  and  the  cost  of  living  would 
fluctuate  in  unison,  but  this  has  not  been  the  case.  Since  1896, 
until  Mr.  McAdoo  raised  them  last  summer,  freight  and  pas- 
senger rates  have  been  practically  imchanged  and  wages  were 
advanced  but  little,  while  the  cost  of  living  has  steadily  in- 
creased. The  existence  of  this  anomaly  is  made  clear  by  the 
chart  and  tabulated  comparison  on  the  preceding  page. 

The  lines  which  run  irregularly  across  the  chart  follow  the 
fluctuations  recorded  since  i8g6  in  the  cost  of  living  and  rail- 
way rates  in  the  United  States  as  shown  by  the  tabulated 
figures.  It  is  assumed  that  the  average  revenue  received  by  the 
railways  for  hauling  a  ton  of  freight  or  a  passenger  one  mile 
represents,  as  it  does,  the  charge  made  for  transportation,  and 
that  Dun's  Index  Number,  which  is  used,  reflects  the  changes 
in  the  cost  of  living  recorded  from  year  to  year. 

Lack  of  space  makes  a  more  detailed  description  of  the 
method  used  in  the  computation  impossible,  but  the  significance 
of   the  figures   will   perhaps   be   better   understood   if  it   is   ex- 


74  SKLFXTED   ARTICLES 

plained  that  they  show  that  the  necessaries  of  life  which  could 
have  been  bought  at  wholesale  for  $72.45  on  July  i,  1897,  would 
have  cost  $233.22  if  bought  on  October  i,  1918.  From  July  i, 
191 7,  the  index  number  figures  are  given  month  by  month,  as 
the  advance  immediately  after  the  United  States  entered  the 
war  was  almost  unbelievably  rapid,  and  the  freight  and  pas- 
senger rate  for  both  the  first  and  last  half  of  1918  are  closely 
estimated  because  the  official  averages  have  not  yet  been  made 
up.  A  careful  study  of  these  exhibits  will  show  that,  even  in- 
cluding the  advances  established  last  summer,  freight  and  pas- 
senger rates  are  but  twelve  and  twenty  per  cent  higher,  re- 
spectivel}-,  than  they  were  in  1896,  while  the  cost  of  living  has 
risen  over  two  hundred  per  cent. 

It  is  not  surprising  that  under  such  conditions  the  railway 
employees  were  impelled  to  use  every  means  at  their  command 
to  secure  an  increase  in  their  pay,  and  that  the  railway  man- 
agers resisted  their  demands  because  the  Interstate  Commerce 
Commission  would  not  permit  an  advance  in  rates. 

Discontent,  strikes,  reluctant  concessions  to  the  wage-earn- 
ers, impaired  efficiency,  and  the  near  bankruptcy  of  the  railways 
were  the  consequences,  complete  insolvency  being  averted  only 
by  the  action  of  the  Government  in  taking  over  the  transporta- 
tion industry  on  January  i,  1918. 

When  this  was  done,  it  immediately  became  clear  that  a  sub- 
stantial advance  in  the  wages  of  railway  employees  was  neces- 
sary in  order  to  retain  their  services  and  enable  them  to  live. 
It  was  granted,  and  freight  and  passenger  rates  were  afterward 
advanced  by  twenty-five  and  fifty  per  cent,  respectively,  in  the 
hope  that  the  increased  revenue  secured  would  offset  the  in- 
creased cost  of  labor.  The  advance  in  wages  allowed,  plus  the 
advance  in  the  cost  of  supplies,  has,  however,  proved  to  be 
greater  than  the  increase  in  revenue  resulting  from  the  advance 
of  rates,  and  a  deficit  of  approximately  $200,000,000  for  the 
first  year  of  Government  operation  is  the  result. 

This  deficit  is  plainly  due  to  the  previous  maladjustment  or 
lack  of  adjustment  between  costs  and  rates. 

If  in  1896  it  had  been  practicable  to  establish,  and  there  had 
been  established,  an  Index  Number  Wage  and  an  Index  number 
freight  and  passenger  rate  in  the  railway  business,  how  much 
trouble  and  distress  would  have  been  avoided ! 

Now  that  the  railways  are  under  a  single  management,  is  it 


PROBLEMS   OF   LABOR  75 

not  practicable  to  do  something  of  the  kind?  It  should  not  be 
necessary  to  advance  rates  in  the  same  proportion  that  wages 
were  increased.  Allowance  should  properly  be  made  for  the 
greater  operating  efficiency  that  is  the  result  of  scientific  prog- 
ress and  the  reduction  in  overhead  costs  that  is  possible  with  an 
increased  density  of  traffic,  but  the  experience  of  the  last  twelve 
months  shows  that  the  public  do  not  object  to  paying  higher 
rates  when  there  is  good  reasons  for  them ;  and  no  clearer 
demonstrmidujn  ad  hoviinem  of  their  reasonableness  can  be 
furnished  than  the  evidence  of  increased  cost  of  living  and  of 
labor  that  the  index  number  supplies. 

Since  the  foregoing  was  written  I  notice  that  the  Index 
Number  Wage  has  been  adopted  in  England  in  the  case  of  at 
least  one  important  concern,  as  witness  the  subjoined  clipped 
from  the  New  York   "Journal  of  Commerce"  of  April  13,  1919 : 

London,  March  14. 
Announcement  was  made  by  Lord  Harris,  Chairman  of  the  South 
African  Gold  Trust,  Ltd.,  at  its  annual  meeting,  that  an  arrangement  had 
been  entered  into  with  the  clerical  forces  whereby  the  bonus  paid  the 
staff  would  be  regulated  by  the  cost  of  living,  1.  e.,  it  would  fluctuate  with 
this  cost  as  indicated  by  Sauerbeck's  index  number  of  commodity  prices. 
The  agreement  provides  that  the  bonus  should  be  represented  by  the 
index  figure  at  the  date  when  the  arrangement  was  made,  and  that 
salaries  shall  not  fluctuate  below  a  certain  minimum  recognized  as  the 
pre-war  standard. 


METHODS   OF   COMPENSATION 

(a)  Wage  Methods  and  Bonuses 

WAGES,    HOURS    AND    INDIVIDUAL 
.  OUTPUT' 

The  Economic  Law  of  Wages 

The  question  o£  compensation  is  inseparable  from  the  general 
wage  problem.  Limitations  of  space  preclude  a  discussion  of 
the  theory  of  wages  and  those  interested  in  the  problem  are 
referred  to  standard  theoretical  works  on  the  subject.  Nor 
would  the  theory  of  wages  as  developed  by  economists  be  of 
much  practical  aid  for  the  purposes  for  which  this  volume  is 
published. 

The  Marxian  theory,  which  is  held  by  the  Socialists  and  is 
the  ultimate  logical  elaboration  of  the  classical  theories  of  Smith 
and  Ricardo,  holds  that  wages  are  determined  by  the  cost  of 
maintaining  a  worker  and  his  family  at  the  standard  of  living 
prevailing  in  society  at  a  given  time.  As  the  standard  of  life  is, 
however,  a  very  elastic  quantity'  varying  greatly  among  different 
groups  of  workers  living  in  the  same  country  and  in  the  same 
period,  the  Marxian  theory,  whatever  its  theoretical  merits,  is 
of  little  practical  value  for  our  purposes. 

At  the  other  extreme  of  economic  thought  is  the  "marginal 
utility"  theory  which  is  today  the  accepted  theory  in  our  schools 
and  universities.  According  to  this  theory,  the  rate  of  wages 
is  determined  by  the  marginal  or  ultimate  utility  of  productiv- 
ity of  labor,  that  is  to  say,  by  the  specific  contribution  which 
the  last  available  laborer  makes  to  the  necessary  product  of 
society. 

The  two  theories  really  supplement  one  another,  and  mark 
the  limits  within  which  wages  fluctuate  in  actual  practice  under 
the  varying  and  interacting  influences   of   supply  and  demand. 

*  By  N.  I.  Stone,  Labor  Manager,  Hickey-Freeman  Company,  Roches- 
ter, N.  Y.  Annals  of  the  American  Academy.  85:120-45.  September, 
1919. 


7S  SELECTED  ARTICLES 

Under  the  most  unfavorable  combination  of  these  two  factors 
wages  cannot  permanently  remain  below  the  prevailing  cost  of 
living  of  a  workman's  family  without  disaster  to  the  workers 
as  well  as  to  the  entire  economic  structure  of  society.  On  the 
other  hand,  wages  cannot  permanently  rise  above  the  value  of 
the  product  contributed  by  labor,  since  no  industrial  enterprise, 
be  it  large  or  small,  could  survive  in  the  struggle  of  competition, 
if  it  continued  for  any  length  of  time  to  pay  out  more  in  wages 
than  its  labor  force  has  contributed  to  the  value  of  its  products. 

Between  these  two  extremes  there  is  an  endless  gradation  of 
rates  of  compensation  determined  by  a  variety  of  circumstances, 
among  which  the  supply  of  and  demand  for  labor,  the  prevail- 
ing cost  of  living,  the  productivity  of  labor  and,  last  but  not 
least,  the  strength  of  labor  organizations  exercised  in  collective 
bargaining,  play  the  chief  part. 

The  process  of  "bargaining,"  in  a  broad  sense  is  the  most 
conspicuous  factor  in  wage  determination.  The  bargaining  may 
take  the  outspoken  form  of  a  bargain  driven  between  a  single 
employer  or  an  association  of  employers  on  the  one  hand  and 
an  individual  workman  or  a  workmen's  union  on  the  other ;  or 
it  may  be  disguised  under  the  form  of  a  workman  hunting  a 
job  and  accepting  what  he  is  offered  when  the  supply  of  labor 
exceeds  the  demand  or,  vice  versa,  of  employers  scouring  the 
market  for  labor  and  paying  what  the  workman  demands  when 
the  demand  for  labor  outruns  the  supply,  as  was  recently  the 
case  at  the  height  of  war  activities.  In  either  case  the  bargain- 
ing process  goes  on,  with  labor  handled  as  any  other  commodity, 
the  buyer  (the  employer)  trying  to  get  his  commodity  as  cheaply 
as  he  can,  and  the  seller  (the  workman)  striving  to  obtain  the 
highest  possible  price. 

Were  the  analogy  between  labor  and  any  other  commodity 
complete,  there  would  be  nothing  further  to  be  said  on  the  sub- 
ject. The  similarity  between  labor  and  other  commodities,  how- 
ever, ends  at  this  point.  For,  while  the  seller  of  an  ordinary 
commodity  parts  with  it  as  soon  as  he  has  delivered  it  to  the 
buj'er,  the  seller  of  the  commodity  known  as  "labor"  is  insepar- 
able from  it.  It  is  from  this  circumstance  that  all  the  perplexi- 
ties of  the  modern  labor  problem  spring.  And  it  is  to  the  fail- 
ure on  the  part  of  employers  to  take  this  fact  into  account  that 
most  of  the  "labor  troubles"  can  be  traced. 


PROBLEMS   OF    LABOR  79 

Wages  and  Labor  Cost 

Even  in  buying  ordinary  commodities  we  have  learned  that 
the  lowest  priced  article  is  not  necessarily  the  cheapest.  An 
experienced  buj'er  will  consider  not  only  the  price  he  is  asked 
to  pay,  but  also  the  quality  of  the  article  he  is  getting  in  the 
bargain.  Unless  the  article  is  a  staple  commodity  absolutely 
standardized  under  market  requirements,  such  as  wheat  or  pig 
iron,  the  lowest  price  will  not  necessarily  mark  the  most  eco- 
nomical purchase.  A  suit  of  clothes  made  of  shoddy,  though 
looking  exactly  the  same  as  one  made  of  virgin  wool,  will  not 
last  as  long  and,  though  selling  at  a  much  lower  price,  will 
prove  the  more  expensive  of  the  two,  when  the  price  paid  for 
each  suit  is  divided  by  the  number  of  months  of  wear  each  gave. 

This  elementary  truth  is  recognized  by  every  experienced 
employer  and  foreman  in  comparing  the  usefulness  of  different 
employes ;  the  worker  who  possesses  superior  skill  or,  who  with 
the  sam.e  skill  works  with  greater  speed,  is  always  preferred 
and  is  readily  offered  a  higher  wage  than  the  prevailing  rate  for 
workers  of  average  speed  or  skill.  But  that  the  same  labor 
force  can  be  made  cheaper  by  raising  its  wages  or  shortening  its 
hours  of  labor,  or  both,  is  still  an  unknown  fact  among  the 
great  body  of  employers,  superintendents  and  foremen,  and, 
when  stated,  is  regarded  with  distrust  and  with  doubt  in  the 
practical  wisdom  of  the  man  who  advances  this  view.  Yet,  it 
has  now  been  accepted  as  an  elementary  principle  of  the  science 
of  management  among  industrial  engineers. 

Stated  baldly,  the  proposition  that  high-priced  labor  is 
cheaper  than  low-priced  labor,  and  that  shorter  hours  are  more 
productive  than  long  ones  sounds  like  a  paradox.  If  that  be 
true,  then  the  age-long  struggle  between  capital  and  labor  for 
higher  wages  and  shorter  hours  has  been  the  most  tragic  mis- 
understanding in  history  in  which  the  employers  have  wasted 
millions  of  dollars  and  countless  lives  fighting  against  their  own 
interests ;  while  labor,  trying  to  improve  its  own  lot.  has  un- 
wittingly fought  for  capital's  best  interests,  trying  to  save  it 
from  its  own  folly. 

The  misunderstanding  is  easily  explained.  All  things  re- 
maining equal,  the  higher  the  rate  of  wages,  the  greater  the 
labor  cost  of  the  manufactured  product.  This  is  perfectly  log- 
ical, but  rests  on  the  false  premise  that  all  things  remain  the 


8o  SELECTED   ARTICLES 

same  when  a  change  in  wages  occurs.  As  a  matter  of  fact,  they 
seldom,  if  ever,  remain  unchanged.  The  mere  increase  in  wages 
will  not  of  itself  produce  the  miracle,  unless  labor  is  so  under- 
paid as  to  cause  the  workers  to  be  poorly  nourished,  inadequately 
clothed,  and  housed  under  unsanitary  conditions.  In  that  case 
a  substantial  increase  in  wages  which  would  enable  them  to  eat 
nourishing  food,  wear  clothing  that  will  protect  them  against 
surroundings  will  of  itself  improve  the  condition  of  the  indi- 
vidual worker  as  a  producing  machine  so  as  to  increase  greatly 
his  productivity.  It  is  but  a  common  sense  application  of  the 
rule  which  prompts  a  sensible  man  to  feed  his  horse  oats,  in- 
stead of  keeping  it  on  an  exclusive  diet  of  hay  and  to  provide 
well  sheltered,  clean  and  sanitary  barns  for  his  cattle,  instead  of 
neglecting  them  as  a  stingy,  short-sighted  farmer  is  apt  to  do.  It 
was  because  of  facts  like  these,  that  the  Ford  plan  of  providing 
a  minimum  rate  of  $5.00  a  day,  practically  doubling  the  earnings 
of  the  bulk  of  his  employes,  proved  such  a  huge  success,  and 
instead  of  increasing  his  cost  of  production,  produced  the  oppo- 
site effect. 

With  the  war  over  and  international  trade  about  to  resume 
its  interrupted  course,  the  cry  for  protection  of  American  labor 
against  the  pauper  labor  of  the  old  world  again  resounds 
through  the  country  and  the  majority  party  in  Congress  bases 
its  program  for  an  immediate  revision  of  the  tariff  almost  solely 
on  that  ground.  It  is  therefore  felt  that  the  universality  of  the 
law  that  high  wages  and  short  hours  spell  lower  costs  rather 
than  the  opposite,  requires  further  demonstration. 

The  writer's  attention  was  drawn  to  this  aspect  of  the  prob- 
lem with  particular  force,  while  it  was  his  good  fortune  to  come 
into  intimate  contact  with  some  of  our  industries  when  in  charge 
of  investigating  into  the  cost  of  production  for  the  United 
States  Tariff  Board.  Some  of  the  most  important  facts  ascer- 
tained in  those  investigations  will  therefore  be  reproduced  from 
an  earlier  statement  by  the  writer : ' 

The  first  fact  established  by  the  Tariff  Board  was  there  is  no  such 
thing  as  a  cost  of  production  in  a  given  industry  not  only  in  one  country, 
but    even    in    the    same    city. 

As  confirmed  bv  the  later  investigations  of  the  New  York  State  Fac- 
tory Investigating  Commission,  and  the  Massachusetts  Commission  in  other 
industries,  and  of  the  Wage  Scale  Board  of  the  Dress  and  Waist  In- 
dustry in  New  York  City,  the  tariff  board  found  that  establishments  exist- 
ing sids  by  side  and  competing  in  the  same  market  are  paying  wages 
differing  as  much  as  50  per  cent  for  substantially  the  same  grade  of  labor. 

IN.  I.  Stone.  Is  the  Minimum  Wage  a  Menace  to  Industry?  Survey 
— February   6,    1915. 


PROBLEMS    OF    LABOR  8i 

It  alao  found  that  neither  the  labor  cost  nor  the  total  coit  of  production 
varies  in  a   direct   ratio   with  wages. 

Thus  in  paper  and  pulp  manufacture  it  was  found  that  the  labor  cost 
of  making  a  ton  of  news-print  paper  in  the  United  States  varied  from 
$2.i()  to  $~.2b  per  ton.-  The  most  remarkable  fact  about  it  was  that 
the  mills  paying  the  lowest  wages  and  having  a  twelve-hour  day,  had  a 
higher  labor  cost  per  ton  of  paper  than  those  paying  the  highest  rates  of 
wages    and    having    an    eight-hour    day. 

The  solution  of  this  puzzle  lies  in  the  chapter  of  the  report  dealing 
with  the  efficiency  of  equipment  in  paper  mills.  Mills  were  found  to 
vary  greatly  in  this  respect.  Some  had  machinery  thirty  years  old;  othcr.; 
boasted  of  machines  with  latest  improvements.  The  older  machiries  had  a 
capacity  of  17  tons  in  24  hours,  whereas  vhe  newer  machines  could  pro- 
duce 50  tons.  The  result,  according  to  the  tariff  board  report  (page  52), 
was  that  the  machine  cost  of  labor  per  ton  of  paper  was  $1.84  on  the  old 
and  only  82  cents  on  the  new,  the  same  rate  of  wages  being  paid  to  the 
machine  tenders  in   each  case. 

But  important  as  the  mechanical  equipment  is  in  determining  the  effi- 
ciency of  labor,  the  human  equation  responds  even  more  readily  to  varia- 
tions  in   wages   and  hours. 

When  the  agitation  for  the  removal  of  the  irnport  duty  on  news-print 
paper  resulted  in  an  inquiry  by  a  special  committee  in  Congress,  a  rep- 
resentative of  the  largest  paper  mill  company  in  the  country  pointed  to 
the  fact  that  they  had  recently  reduced  the  hours  of  labor  from  twelve  to 
eight,  without  reducing  the  weekly  rate  of  wages,  incurring  a  correspond- 
ing increase  in  their  labor  cost.  The  figures  secured  by  the  tariff  board 
from  the  books  of  several  mills  (including  those  to  which  reference  was 
made  before  the  committee  of  Congress")  showed  a  diminution  in  the  labor 
cost  per  ton  of  paper  from  $4.35  to  $3.73  in  iqoq.  under  the  eight-hour 
system.  In  other  words,  an  increase  in  the  hourly  rate  of  wages  to  the 
extent  of  50  per  cent  not  only  failed  to  result  m  a  corresponding  in- 
crease in  the  cost  of  labor  per  ton  of  paper,  but  was  accompanied  by  an 
.ictual  lowering  in  cost.  Though  the  figure  of  $4-35  in  igoS  happened 
to  be  the  highest  in  ten  years,  the  tariff  board  report  (page  7q)  showed 
that  there  was  not  a  single  year  in  that  decade  under  the  twelve-hour 
system  which  showed  as  low  a  cost  as  in  1909,  the  first  year  under  the 
eight-hour  i^ystem.  On  the  other  hand,  when  it  is  remembered  that  during 
a  large  part  of  the  year  of  1906  the  mills  were  idle  owing  to  the  strike 
for  shorter  hours,  and  that  costs  are  usually  above  normal  when  a  plant 
is  started  up  after  a  period  of  idleness,  there  is  every  reason  to  believe 
that   the   labor   cost   was   still    further   reduced   after    1909. 

Yet  it  cannot  be  said  that  there  was  a  radical  change  in  the  equip- 
ment of  the  mills  to  which  these  figures  relate,  immediately  following  the 
introduction  of  the  eight-hour  shift.  The  change  was  due  largely  to  the 
increase  in  the  personal  efficiency  of  the  workers  under  the  shorter  day. 
The  duties  of  a  machine  tender  in  a  paper  mil!  consist  chiefly  in  watch- 
ing the  thin  liquid  sheet  of  paper  as  it  first  appears  on  the  large  cylinder 
oi  the  machine.  A  slight  twist  at  the  outset  will  result  in  reams  of 
paper  being  torn  on  the  cylinder,  and  a  mad  rush  of  all  the  tenders  in 
an  endeavor  to  set  things  right;  and  it  will  frequently  require  a  com- 
plete stoppage  of  the  machine,  all  of  which  greatly  increases  the  cost  of 
production.  The  fatigue  caused  by  twelve  hours  of  such  nervous  and 
physical  strain,  had  resulted  in  a  much  greater  proportion  of  damaged 
paper  and  interruption  of  work  than  was  the  case  after  the  adoption 
of   the    eight-hour   day. 

With  the  hours  of  labor  cut  down  from  twelve  to  eight,  the  machine 
tender  was  relieved  from  duty  during  the  last  four  hours  which  were 
the  most  trying  to  the  nerves  and  muscles  of  a  worker,  when  his  alert- 
ness and  general  efficiency  were  at  their  lowest  ebb.  The  reduction  of 
hours  not  only  enabled  him  to  leave  the  mill  less  fatigued  than  formerly, 
but  with  the  resting  period  increased  by  four  hours  a  day.  the  recuperation 
was  more  thorough;  so  that  his  alertness  of  mind  and  body  was  greater 
upon  his  return  to  work  than  under  the  old  system  it  used  to  be  even 
during  the  first  eight  hours.  With  his  mind  and  body  more  alert,  he 
was  able  to  detect  in  time  imperfections  which  formerly  escaped  his  at- 
tention. 

=  U.  S.  Tariff  Board  Report  on  Pulp  and  NcM-Priiit  Paper  Iinhistry, 
1911,  p.   39. 


82  SELECTED   ARTICLES 

This  resulted  in  so  great  an  increase  in  the  relative  time  the  machines 
were  in  actual  operation  (free  from  breakdowns  and  stoppages),  accomp- 
anied by  a  reduction  in  the  quantity  of  damaged  paper  on  which,  in  the 
preceding  stages  of  production,  labor  had  been  wasted,  that  the  labor 
cost  of  production  of  paper  declined,  in  spite  of  the  increase  in  the  hourly 
rate    of    wages,   by   as   much    as    50    per   cent. 

Even  more  striking  proved  many  of  the  facts  disclosed  by  the  investi- 
•gation  of  the  cotton  industry.  In  spite  of  higher  wages  prevailing  in  the 
United  States,  as  compared  with  England,  and  the  longer  start  which  the 
English  cotton  industry  has  had  over  the  American,  it  was  found  that 
many  varieties  of  cotton  goods,  including  some  of  the  finest  women's 
dress  goods,  were  sold  at  lower  prices  in  the  United  States  than  in  Eng- 
land, and  exported  to  Canada  in  competition  with  British  goods  despite 
the  preferential  tariff  in  favor  of  England  which  places  imports  from 
the  United  States  at  a  disadvantage. 

That  American  cotton  goods  compete  with  English  in  China  and  South 
America,  was  known  before  the  tariff  board  made  its  investigation.  But 
fear  was  expressed  of  the  coming  menace  of  Japanese  competition  with 
its  fifteen-cents-a-day  weavers.  The  tariff  board,  therefore,  extended  its 
investigation  to  Japan,  and  figures  compared  with  similar  data  for  cor- 
responding mills  in  the  United  States  led  to  the  startling  revelation  that, 
wih  the  superior  American  machinery  and  superior  personal  efficiency  of 
American  labor,  the  American  weaver  receiving  $1.60  a  day  was  in  cer- 
tain cases  cheaper  than  the  Japanese  weaver  at   iSlA   cents  a   day.  ^ 

A  study  by  the  tariff  board  of  labor  efficiency  in  the  various  processes 
of  wool  manufacture  showed  that  almost  invariably  the  mills  paying 
higher  rates  of  wages  per  hour,  produced  goods  at  a  lower  cost  than 
their   competitors    paying    lower    wages. 

Thus,  in  wool  scouring  the  lowest  average  wage  paid  to  machine  op- 
eratives in  the  thirty  mills  examined,  was  found  to  be  12.16  cents  per 
hour,  and  the  highest  17.70.  ■*  Yet  the  low  wage  mill  showed  a  labor  cost 
of  twenty-one  cents  per  hundred  pounds  of  wool,  and  the  high  wage 
mill  had  a  cost  of  only  fiften  cents.  One-half  of  the  difference  was  ac- 
counted for  by  the  fact  that  the  low  wage  mill  paid  nine  cents  per  hun- 
dred pounds  for  supervisory  labor,  such  as  foremen,  whereas  the  high 
wage  mill   paid   only   six   cents,   showing   it   had   more    efficient   management. 

In  the  carding  department  of  seventeen  worsted  mills,  the  mill  paying 
its  machine  operatives  an  average  of  13.18  cents  per  hour  had  a  machine 
labor  cost  of  four  cents  per  hundred  pounds;  while  the  mill  paying  its 
machine  operatives  only  11.86  cents  per  hour  had  a  cost  of  twenty-five 
cents  per  hundred  pounds.  This  was  due  largely  to  the  fact  that  the 
lower  cost,  high  wage  mill  had  machinery  enabling  every  operator  to  turn 
out  more  than  326  pounds  per  hour,  while  the  high  cost,  low  wage  mill 
was   turning   out   less   than    48    pounds    per   hour. 

The  same  tendency  was  observed  in  the  carding  departments  of 
twenty-six  woolen  mills.  The  mill  with  the  highest  machine  output  per 
man  per  hour,  namely,  57.7  pounds,  had  a  machinery  labor  cost  of  twenty- 
three  cents  per  hundred  pounds,  while  the  mill  with  a  machine  output  of 
only  six  pounds  per  operative  per  hour  had  a  cost  of  $1.64  per  hundred 
pounds.  Yet  this  mill,  with  a  cost  seven  times  higher  than  the  other, 
paid  its  operatives  only  0.86  cents  per  hour,  against  13.00  cents  paid  by 
its    more    successful    competitor. 

These  examples  could  be  repeated  for  other  departments  of  woolen 
and  worsted  mills,  but  will  suffice  to  illustrate  the  point  that  higher  wages 
do  not  necessarily  mean  higher  costs.  They  show  that  mill  efficiency  de- 
pends more  on  a  liberal  use  of  the  most  improved  machinery  than  on 
low  wages.  Thoughtful  planning  in  arranging  the  machinery  to  save 
unnecessary  steps  to  the  employes,  careful  buying  of  raw  materials,  the 
skillful  organization  and  utilization  of  the  labor  force  in  the  mill,  syste- 
matic watching  of  a  thousand  details,  each  affecting  the  cost  of  manu- 
facture,  will   reduce   running  expenses  to  an   astonishing   degree. 

It  may  be  said  that  there  need  not  be  any  relation  between  the  pay 
of  the  help  and  the  efficiency  of  the  management  at  the  head  of  the  mill. 
There  seems  to  be  no  necessary  connection  between  the  two,  yet  economic 
literature  is   full  of  references  to  the  fact  that  successful  strikes   resulting 

3  U.  S.  Tariff  Board  Report  on  Cotton  Industry,  p.  12.  IVeaiers  wage 
hill,   table   162,   p.    ^,26. 

*  Tariff  Board  ticl>ort  on   Wool  and  Manufacturers  of  Wool,  p.   1022. 


PROBLEMS   OF   LABOR  83 

in  an  appreciable  rise  of  wages  or  reduction  of  hours  have  been  followed 
by  the  introduction  of  new  machinery  or  other  labor  saving  devices  to 
offset  the  heightened  cost.  All  things  remaining  equal,  an  increase  of 
wages  must  necessarily  lead  to  ■  an  increase  in  the  cost  of  production. 
The  threatening  diminution  of  profits,  acts  as  a  powerful  stimulus  to  the 
owner  or  manager  of  a  plant  who  is  anxious  to  make  possible  savings, 
where   he   was   satisfied   before   to   plod   along   in   the   established   rut. 

Relation   of  Compensation   to   Output 

Week  Work 

That  high  wages  are  economical  when  accompanied  by  a 
corresponding  output,  is  easily  understood.  "But,"  says  the 
average  employer,  "the  two  do  not  necessarily  go  together.  The 
tendency  of  the  average  worker,  especially,  the  union  worker,  is 
to  lie  down  on  his  job.  When  paid  by  the  week,  he  tries  to  keep 
down  his  output  partly  from  inertia  and  a  natural  tendency  to 
'take  things  easy,'  and  partly  from  a  feeling  that  the  less  he 
will  produce,  the  more  work  there  will  be  to  go  around  among 
his  fellow-workers.  And  this,  in  turn,  he  feels,  will  keep  down 
competition  for  jobs  among  workmen  and  help  keep  up  wages." 

Unfortunately,  this  charge  is  justified  to  a  large  extent.  It  is 
the  way  human  nature  works  under  certain  conditions.  Know- 
ing that  he  will  be  unceremoniously  thrown  out  on  the  street 
when  not  needed,  and  having  no  desire  to  subject  his  family  to 
the  hazards  of  hardships  or  starvation,  which  is  the  lot  of  the 
unemployed  man,  the  workman  has  no  more  regard  for  the 
interests  of  the  employer  than  the  latter  reveals  for  him.  Not 
until  industry  or  society  provides  adequate  safeguards  for  the 
interests  of  the  worker  who  suddenly  finds  himself  displaced 
through  no  fault  of  his  own,  can  he  be  expected  to  change  his 
attitude. 

Manufacturers,  industrial  engineers,  foremen  and  all  those 
who  employ  labor  in  industry,  prefer,  therefore,  to  base  com- 
pensation on  output,  except  in  industries  where  the  work  of  the 
employe  is  so  controlled  through  the  operation  of  his  machine 
or  the  organization  of  the  factory  or  mill  that  he  cannot  easily 
•educe  output. 

Piece  Work 

Advantages  of  Piece  Work. — The  simplest  way  of  basing 
compensation  on  output  is  through  piece  work.  The  compensa- 
tion of  the  worker  is  strictly  proportional  to  his  exertions.  The 
more  he  produces,  the  greater  the  contents  of  his  pay  envelope. 
With  the  piece  rate  once  determined,  the  system  seems  to  work 


84  SELECTED   ARTICLES 

fairly  to  both  sides.  The  interests  of  both  employer  and  em- 
ploye seem  to  be  identical,  since  the  more  the  worker  earns, 
the  greater  the  production  and,  therefore,  the  lower  the  over- 
head expense  of  the  plant  per  unit  of  product. 

Disadvantages  of  Piece  Work. — Unfortunately,  the  same  can- 
not be  said  of  the  rate  itself.  There  is  an  obvious  conflict  of 
interests  in  determining  the  rate,  the  old  game  of  the  seller  (the 
worker)  trying  to  get  the  highest  possible  price  and  the  buyer 
(the  employer)  seeking  to  buy  cheap,  reasserting  itself  in  this 
case.  If  this  were  the  only  drawback  of  the  piece  rate  system, 
it  would  be  eliminated,  at  least,  upon  the  determination  of  the 
rate.  Uiifortunatel}',  industrial  practice  has  intensified  the  evil 
a  thousand  fold  and  has  caused  piece  workers  to  restrict  out- 
put with  no  less  determination  than  that  shown  by  time  work- 
ers. This  practice  consists  of  cutting  down  piece  rates  when 
the  workers  earn  "too  much"  money. 

I.  Rate  Cutting. — The  late  Frederick  Taylor  addressing  the 
Efficiency  Society  of  New  York  shortly  before  his  death  gave  a 
striking  recital  of  the  reaction  of  the  worker  under  this  practice. 
He  told  of  his  early  experience  as  a  mechanic  at  the  Midvale 
Steel  Company  plant  and  how,  when  he  attempted  to  do  an 
honest  day's  work  he  was  warned  by  his  fellow-workers  to  "go 
slow."  The  admonition  was  so  emphatic  that  he  soon  found  it 
best  for  his  health  to  fall  in  line  with  the  rest  of  the  crowd.  A 
few  years  later  he  was  promoted  to  a  foremanship. 

On  assuming  his  new  duties  he  called  together  all  his  fellow- 
workers  and  pointed  out  to  them  that  having  come  up  from  the 
ranks  he  knew  all  the  tricks  of  the  "laying  down"  game  and  that, 
therefore,  he  expected  them  to  turn  a  new  leaf  and  do  the  best 
they  could.  In  turn  he  assured  them  that  they  need  have  no 
fear  of  their  piece  rates  being  cut  no  matter  how  nuich  their 
earnings  might  go  up  as  a  result  of  their  increased  efforts.  Tiie 
workers  took  him  at  his  word  and  went  to  work  with  a  will. 
Soon  the  new  foreman  was  the  talk  of  the  plant,  for  he  was 
breaking  all  records  of  production.  It  was  not  very  long  before 
one  of  the  directors  of  the  company  visited  the  plant  and  heard 
of  the  remarkable  performance  of  the  new  foreman.  Being  of 
a  curious  mind,  he  looked  up  the  shop  personally  and  inquired 
for  the  pay  roll. 

Like  the  good  business  man  that  he  was,  he  was  shocked  by 
the  inordinately  high  wages  of  the  employes  in  Taylor's  shop 
exceeding  by  several  dollars  the  prevailing  rate  in  the  industry. 


PROBLEMS   OF   LABOR  85 

He  ordered  the  rates  cut  in  spite  of  all  the  pleadings  of  the 
superintendent  and  the  foreman  who  pointed  out  the  destruction 
of  morale  among  the  working  force  which  this  act  would  cause. 
Needless  to  say  that  the  eflfect  was  to  destroy  all  the  confidence 
in  the  integrity  of  the  employer  which  Mr.  Taylor  had  built  up 
among  his  men.  His  despair  knew  no  bounds.  Most  men  in 
his  place  would  have  given  up  the  struggle,  but  Taylor  was  no 
ordinary  man.  The  shock  he  experienced  caused  him  to  do 
some  hard  thinking  and  from  this  experience  was  born  his 
Principles  of  Scientific  Management. 

Mr.  Taylor's  experience  was  not  exceptional.  Anyone  with 
the  least  industrial  experience  can  cite  similar  instances  from 
plants  under  his  own  observation.  This  virtually  uniform  prac- 
tice has  embittered  the  workman  and  has  undermined  his  con- 
fidence in  the  employer  to  an  extent  that  no  amount  of  assur- 
ance of  a  change  of  policy  seems  able  to  restore. 

Much  of  the  rate  cutting  is  due  to  cupidity  or  short  sighted- 
ness  on  the  part  of  employers  who  do  not  realize  that  for  every 
dollar  in  wages  which  they  thus  save  they  lose  infinitely  more 
in  lost  efficiency  caused  by  the  curtailment  of  output  by  workers 
to  which  they  are  forced  to  resort  in  self-defense. 

But  even  with  the  best  of  intentions  on  the  part  of  employing 
management  piece-rate  cutting  is  frequently  unavoidable.  In  a 
plant  having  much  sub-division  of  labor,  it  is  impossible  to  allow 
a  rate  to  remain  uncut  where  it  yields  a  particular  section  of 
workers  earnings  so  high  as  to  be  out  of  all  proportion  to 
those  of  workers  in  other  sections.  If  the  prevailing  earnings 
of  skilled  workers  of  that  craft  are,  say,  $5  per  day,  and  a  mis- 
calculated piece  rate  yields  workers  on  a  particular  operation 
$10  per  day,  all  the  other  employes  will  demand  an  increase  in 
rates  to  bring  their  earnings  up  to  the  level  of  the  lucky  section. 
It  is  a  psychological  law.  There  are  no  absolute  standards  of 
earnings  which  will  keep  a  worker  satisfied.  His  satisfaction 
is  largely  based  upon  a  sense  of  relative  justice  measured  by 
comparison  with  prevailing  earnings  among  groups  of  workers 
of  similar  skill. 

2.  Loss  of  Earnings  Through  Inefficiency  of  Management. — 
Another  strong  objection  to  piece  work  raised  by  workmen  is 
based  on  the  loss  of  earnings  which  they  incur  through  ineffi- 
ciency of  management  or  other  losses  beyond  their  control. 
Only  highly  efficient  plants — and  their  number  is  as  yet  small — 
know  how  to  maintain  an   even  flow  of  work  throughout  the 


86  SELECTED   ARTICLES 

plant.  The  balance  of  work  between  the  different  departments 
of  the  plant  is  rarely  maintained  on  an  even  keel  for  any  length 
of  time.  As  a  result,  workers  in  one  department  may  be  idle 
for  hours,  or  considerable  parts  of  the  daj',  and  sometimes  even 
for  days,  while  other  departments  have  more  work  than  they 
can  handle.  Poor  control  of  the  stock  room  results  in  the  lack 
of  one  or  more  items  of  material  being  discovered  at  the  last 
moment,  when  it  is  too  late  to  prevent  interruption  of  work. 
All  these  breaks  in  production  fall  with  their  full  weight  upon 
the  worker,  depriving  him  of  earnnigs  through  no  fault  of  his 
own,  while  his  time  is  at  the  call  and  disposal  of  his  employer. 

3.  Speeding. — A  third  objection  to  piece  work  raised  by 
workmen,  particularly  by  organized  labor,  is  the  excessive  speed- 
ing which  the  system  encourages  to  the  great  detriment  of  the 
workers'  health,  frequently  causing  physical  breakdown  in  the 
prime  of  life. 

4.  Jealousy  and  Favoritism. — The  desire  to  earn  as  much  as 
possible  causes  a  good  deal  of  racing  among  the  workmen  pro- 
voking jealousies  among  them  which  foremen  know  how  to 
utilize  to  prevent  solidarity  among  the  workers,  by  making 
favorites  of  some  and  discriminating  against  others.  Union  men 
are  often  given  less  desirable  work  than  those  who  do  not  be- 
long to  the  union ;  frequently  they  are  made  to  wait  longer  for 
their  work  in  the  intervals  between  one  job  and  another. 

5.  Sacrifice  of  Quality. — An  objection  to  piece  work  which 
comes  from  employers  is  the  tendency  on  the  part  of  workers 
to  sacrifice  quality  for  quantity.  Insistence  on  the  part  of  the 
management  on  standards  of  quality  leads  to  friction  with  the 
help. 

Such  are  the  objections  to  piece  work  which  have  caused  the 
industrial  engineer  to  seek  other  means  of  compensation  for 
labor.  With  all  its  drawbacks,  however,  the  piece-rate  system 
has  the  great  advantage  over  the  straight  time-work  in  that  it 
gives  the  workman  a  direct  interest  in  his  output,  since  his  com- 
pensation rises  automatically  in  a  direct  ratio  to  his  effort  and 
skill.  From  the  point  of  view  of  the  employer  the  piece-work 
system  offers  the  great  advantage  of  making  wages  strictly  de- 
pendent upon  output  and  automatically  stopping  wage  leaks 
which  are  so  common  under  the  straight  time-work  system.  Any 
substitute  for  piece  work  must,  therefore,  retain  its  advantages 
while  eliminating  its  disadvantages.  This  ideal  is  believed  by 
leading  industrial  engineers  to  be  attained  in 


PROBLEMS   OF   LABOR  S? 

The  Time  and  Bonus  System 

The  essential  feature  of  this  system  of  compensation  for 
labor  is  the  return  to  the  original  plan  of  paying  the  workman 
a  wage  on  a  time  basis.  This  is  based  on  the  recognition  of  the 
fact  that  the  workman  is  entitled  to  a  certain  minimum  com- 
pensation for  his  time  and  labor  power  which  he  places  at  the 
disposal  of  his  employer.  At  the  same  time  his  interest  in  his 
output  is  stimulated  by  an  additional  compensation,  known  as 
bonus  or  premium,  which  is  based  upon  output. 

There  are  several  systems  of  bonus  compensation.  The  best 
known  plans  are  all  based  on  careful  time  studies  as  a  prelimi- 
nary to  fixing  any  rate  of  compensation.  All  of  these  systems 
have  in  common:  (i)  a  straight  hourly  rate  for  each  operation 
based  upon  the  skill  it  requires;  (2)  a  definite  time  allowance 
for  every  operation;  (3)  an  additional  compensation,  known 
as  "bonus"  for  doing  the  work  in  less  time  than  the  allowance 
calls  for. 

Advantages  of  the  Time  and  Bonus  System. — There  are 
definite  advantages  and  distinct  merits  attached  to  the  time  and 
bonus  system  of  compensation,  (i)  First  and  foremost  from 
the  point  of  view  of  justice  to  the  worker  is  the  definite  mini- 
mum hourly  compensation  independent  of  his  output.  The 
worker  is  entitled  to  a  living  wage,  if  he  is  at  all  fit  to  be  em- 
ployed. Straight  piece  work  does  not  assure  him  such  a  mini- 
mum wage.  Straight  time  work  gives  him  a  definite  wage,  but 
deprives  him  of  any  additional  compensation  in  proportion  to 
increased  effort,  skill  or  speed.  It  thereby  destroys  the  incentive 
to  conscientious  endeavor,  thus  hurting  the  interests  of  the 
employer  and  employe  alike.  (2)  This  incentive  is  present 
under  the  bonus  system,  although  the  bonus  earned  is  usually 
not  proportionate  to  the  increased  output,  as  is  the  case  under 
piece  work,  as  will  be  shown  below.  (3)  As  already  stated,  the 
definite  time  allowance  for  each  job  is  based  upon  careful  time 
study.  While  there  has  been  a  good  deal  of  well  merited  criti- 
cism of  the  methods  employed  in  time  studies,^  the  conscious 
aim  of  leading  industrial  engineers  like  Taylor,  Emerson,  Gantt, 
Earth,  et  al,  has  been  to  determine,  by  careful  and  conscientious 
study  of  the  motions  of  several  workers  on  a  given  operation, 

1  See  Robert  F.  Hoxie,  Scientific  Management  &  Labor,  Appleton  Co., 
1915- 


88  SELECTED   ARTICLES 

"the  time  it  ought  to  take  to  do  the  work  without  undue  effort 
when  every  unnecessary  waste  is  eliminated. "2 

In  this  respect  the  time  and  bonus  plan  is  superior  to  the  old 
time  piece  rate  system.  The  predetermined  time  allowance 
based  upon  the  elimination  of  "every  unnecessary  waste"  reduces 
to  a  minimum  the  chance  of  fi.xing  the  rates  out  of  all  proportion 
with  existing  standards  of  wages,  with  the  unpleasant  necessity 
of  cutting  the  rates,  a  practice  so  disastrous  to  the  worker  and 
employer  alike. 

On  the  other  hand,  the  time  study  aims  to  determine  a  fair 
time  allowance  for  every  job  "without  undue  effort."  Speeding 
is  frowned  upon  by  the  enlightened  engineer  who  recognizes 
that  anything  that  injures  the  health  of  the  worker  cannot  be 
of  permanent  benefit  to  the  industry.  Scientific  time  studies  have 
established  the  fact  that  every  person  and  every  job  have  their 
own  time-rhythm  which  determines  the  normal  rate  at  which 
the  work  can  best  be  done.  To  illustrate :  the  normal  gait  for 
walking  for  the  average  person  is,  let  us  say,  three  miles  per 
hour ;  for  a  child  it  may  be  only  one  mile  an  hour.  A  normal 
man  walking  at  the  rate  of  a  child  would  feel  more  tired  at  the 
end  of  an  hour  after  walking  one  mile,  than  he  would,  if  he 
walked  three  miles  at  his  normal  pace.  On  the  other  hand,  he 
would  not  on!\-  be  tired  but  exhausted,  if,  through  speeding,  he 
managed  to  walk  live  or  six  miles  in  one  hour.  Scientific  time 
study  aims  at  establishing  the  normal  rate  of  speed,  avoiding 
"undue  effort"  on  the  one  hand,  and  "every  unnecessarj-  waste" 
of  time  or  effort  on  the  other. 

Having  established  the  standard  time  for  an  operation 
through  time  study,  there  is  no  reason  why  a  proper  piece  rate 
cannot  be  established  just  as  accurately  as  a  bonus  rate,  which 
would  prevent  the  necessity  of  cutting  the  rate  later.  At  the 
plant  of  Joseph  &  Feiss  of  Cleveland,  where  Scientific  Manage- 
ment is  in  practice,  practically  all  work  is  done  at  piece  rates 
based  on  time  studies  and  the  system  has  been  in  successful 
operation  for  nearly  a  decade.  The  claim  of  this  piece  rate 
s^-stem  to  superiority  is  based  on  the  fact  that  the  rates  being 
determined  through  time  studies,  there  is  no  occasion  for  cut- 
ting them.  But  even  this  safeguard  does  not  relieve  it  of  the 
charge  that,  in  common  with  all  piece  rate  systems,  it  encourages 
speeding.  This  is  overcome  in  part  by  deductions  from  pay 
for  each  defect  discovered  in  the  work  of  an  employe  and  an 

-  Harrington  Emerson,  A  Comparative  Study  of  Wage  and  Bonus  Plans. 
New   York,    1917. 


PROBLEMS    OF   LABOR  S9 

equal  reward  for  every  defect  discovered  by  the  employe  in 
another  person's  work.  Not  all  bonus  plans  operate  in  the 
same  manner  in  their  effect  on  speeding.  Some  offer  an  in- 
centive to  speeding  far  worse  than  straight  piece  work,  while 
others  are  calculated  to  discourage  it.  We  will  consider  here 
the  five  best  known  bonus  systems. 

The  Halsey  Prentiuni  Plan  was  the  first  bonus  system 
adopted.  Under  this  plan  the  worker  receives  one-third,  or  one- 
half  of  the  time  saved.  Thus,  if  the  time  set  for  a  job  is  four 
hours  and  the  rate  is  50c  per  hour,  and  if  the  job  takes  actually 
only  two  hours,  the  worker  would  receive,  under  the  one-half 
premium  plan,  2x50c,  or  $1.00  for  the  time  he  worked  plus  ^  of 
$1.00,  or  50c  for  the  time  saved,  making  the  total  wage  $1.50 
for  two  hours,  or  75c  per  hour.  Under  the  one-third  plan  he 
would  receive  $1.00  plus  33c,  or  $1.33,  or  67c  per  hour. 

The  Halsey  Plan  was  adopted  before  scientific  time  studies 
were  in  use  in  industry.  The  premium  it  offers  the  worker  is 
based  upon  standard  time  as  determined  by  previous  records  in 
the  shop.  There  is  nothing  inherent  in  the  Halsey  plan,  how- 
ever, to  prevent  its  adoption  in  combination  with  scientific  time 
studies.  Under  this  plan  both  employer  and  worker  are 
benefited  as  the  efficiency  of  the  worker  is  increased,  as  shown 
by  the  figures  in  Table  i. 

TABLE  I 

Illustration   of   Halsey's   Preuium    Plan 

Hours  Compensation  Labor  Cost 


__  _u  o  a  „"  i-i- 

rt  an  «  cs°  oti 

♦;  ^  a  -S  -"U  J3  a 

o  o  o  o  re 

E-  H  Z  H  J 

:   One-half   of  Time-Wage   Saved 
2.00  .50  4  2.00  .50 

I-7S  -SSV^      4  I-7S  .43'^4 

1-50  .75  4  1-50  .371/2 

1.25  1.25  4  1.25  .31^4 

One-third    of  Time-Wage    Saved 
2.00            .50  4  2.00  .50 

1.67  .56         4  1.67  .4i?4 

1-33  -67  4  1.33  .3354 

1. 00  1. 00  4  1. 00  .25 

As  will  be  seen  from  the  figures  in  Table  i,  as  the  worker 
gains  in  efificiency  his  earnings  under  the  one-half  bonus  plan 
may  rise,  in  the  illustration  chosen,  from  50c  per  hour  to  $1.25 
per  hour,  while  at  the  same  time  the  labor  cost  to  the  employer 


Rate 

per 

hr 

.   50c- 

-P 

remium 

4 

4 

0 

2.00 

.0 

4 

3 

I 

1.50 

■25 

4 

2 

2 

1. 00 

•50 

4 

I 

3 

•50 

•75 

Rate 

per 

hr. 

50c- 

-Premium : 

4 

4 

0 

2.00 

.0 

4 

3 

: 

1.50 

.16% 

4 

2 

2 

1. 00 

•33^ 

4 

I 

3 

•SO 

•50 

90 


SELECTED   ARTICLES 


goes  down  from  50c  per  unit  of  product  to  3l>^c.  Under  the 
one-third  bonus  plan,  the  earnings  of  the  worker  will  go  up 
from  50c  to  $1.00  per  hour,  while  the  labor  cost  per  unit  of 
product  will  at  the  same  time  go  down  50c  to  25c.  In  other 
words,  under  the  one-half  plan  the  earnings  of  the  worker  per 
hour  would  go  up  2V2  times,  while  the  labor  cost  to  the  em- 
ployer would  go  down  but  a  little  over  one-third;  while  under 
the  one-third  plan  the  earnings  of  the  worker  would  double  and 
the  labor  cost  to  the  employer  would  be  reduced  one-half. 

The  Rowan  Premium  Plan  provides  for  the  payment  of  a 
regular  hourly  rate  and,  in  addition,  of  a  bonus  equal  to  the  per- 
centage of  time  saved,  multiplied  by  the  wage  for  the  time 
actually  taken  to  do  the  work.  Under  this  plan  the  amount 
of  which  the  bonus  forms  a  percentage  is  based  not  on  the 
time  saved,  but  on  the  time  taken,  so  that  the  less  time  the 
worker  takes  to  do  his  job,  the  less  is  the  bonus  in  proportion 
to  his  efforts.  Thus,  if  the  set  time  is  four  hours  and  the  rate 
is  50c  per  hour,  and  the  job  is  done  in  three  hours,  the  worker 
has  saved  one  hour,  or  25  %.  His  regular  wage  would  there- 
fore be  equal  to  1.50  and  his  bonus  to  25%  of  that  amount,  or 
37V2C. 

On  the  other  hand,  if  the  workman  did  the  job  in  one  hour, 
saving  his  employer  75%  of  the  time  set,  his  bonus,  as  will  be 
seen  from  Table  2,  illustrating  the  working  of  the  plan,  would 
be  no  greater,  that  is  to  say,  the  same  37^/^c.  This  plan  is  mani- 
festly unfair  to  the  workman,  yet  even  under  this  system  of 
bonus  payments  it  will  be  seen  from  the  table  below  that  it 
gives  the  workman  a  substantial  increase  of  earnings  per  hour 
as  the  labor  cost  per  unit  of  product  is  reduced.  The  employer, 
however,  is  benefited  to  a  much  larger  extent  than  the  employe. 

TABLE  2 

Illustration  of  Rowan's  Premium  Plan 

Rate   per  hr.    500.      Bonus:    Percentage   of   time   saved   multiplied   by   wage 

for   time  in  which  the  work  was  done. 


Houi 

rs 

Compensation 

Lab 

or  Cost 

4) 

bfl 

« 

u 

T> 

u 

> 

bo 

'C  3 

'S 

0 
a 

u 

3 

I> 

**^'rt 

■a 

a 
n 

(J5 

3 
< 

V 

> 

> 

3 
C 
0 

0 

H 

1^ 

0  rt 

1^ 

0  V 

4 

4 

4 
3 

0 

0% 

2.00 

.0 

2.00 

•  50 

4 

2.00 

•50 

I 

25% 

1.50 

.37V2 

i.87J^ 

.62  ¥2 

4 

1.87  Va 

Ik 

4 
4 

2 

2 

50% 

1. 00 

•50 

1.50 

•75 

4 

'•5°  , 

I 

3 

75% 

.50 

.37^ 

.87% 

.87% 

4 

.SyVz 

.22 

PROBLEMS   OF   LABOR  91 

The  Gantt  Task  and  Bonus  System. — This  is  a  modification 
of  the  Taylor  differential  piece-rate  system.  Under  the  Taylor 
plan,  the  task  or  number  of  units  which  a  workman  can  produce 
in  a  given  time  is  determined  by  careful  time  study.  Two  piece- 
rates  are  then  set  for  the  work:  a  low  rate,  if  the  worker  fails 
to  make  his  task  in  the  prescribed  time  and  a  higher  rate,  if  he 
makes  his  task  in  the  standard  time,  or  less.  Under  this  system 
of  payment,  the  worker  is  stimulated  to  exert  himself  to  the 
utmost  to  earn  the  higher  rate.  The  incentive  to  speeding  is 
obvious. 

The  Gantt  plan  converts  the  Taj-lor  differential  piece-rate 
system  into  a  task  and  bonus  system,  that  is  to  say,  instead  of 
having  two  piece-rates,  there  is  a  basic  rate  per  hour  which  is 
all  that  the  worker  receives  so  long  as  he  fails  to  meet  the  task ; 
as  soon,  however,  as  the  worker  has  made  his  task  in  standard 
time  or  less,  he  receives  a  bonus  varying  from  20  to  50  per 
cent,  according  to  the  nature  of  the  work  and  the  degree  of  in- 
ducement which  is  regarded  necessary  to  insure  the  interest  of 
the  worker.  Once  the  w^orker  has  achieved  his  task  in  a  given 
time,  the  combined  time  and  bonus  rate  remains  fixed,  so  that 
from  that  point  on  the  compensation  becomes  virtually  a  straight 
piece-rate,  the  same  as  under  the  Taylor  sj^stem. 

In  the  illustration  given  in  Table  3  it  is  assumed  that  the 
basic  rate  for  the  worker  is  50c  per  hour,  and  that  the  bonus 
is  50%  of  the  wages  earned  in  standard  time.  Under  this  sys- 
tem of  payment,  if  the  standard  time  is  four  hours,  and  it  takes 
the  worker  anything  from  5  to  8  hours,  he  will  receive  a  straight 
hourly  rate  of  50c  per  hour.  The  moment,  however,  he  makes 
his  task,  that  is  to  say,  as  soon  as  he  does  the  required  number 
of  units  in  4  hours,  he  receives  in  addition  to  $2.00  for  4  hours' 
work,  a  bonus  of  50%  of  that  amount,  or  $1.00,  making  the  total 
payment  equal  $3.00.  His  earnings  thus  suddenly  increase  from 
50C  to  75c  per  hour.  The  achievement  of  the  task  thus  brings 
a  high  reward,  but  (as  in  the  case  of  the  Taylor  system)  if  the 
workman  has  strained  himself  to  the  utmost  and  reduced  the 
time,  in  which  he  makes  the  task,  from  8  hours  to,  say,  4%  only, 
he  would  get  no  reward  whatever,  still  drawing  his  50c  per 
hour.  In  fact,  he  would  be  penalized  for  his  extra  effort,  for 
instead  of  receiving  $4.00  for  the  job  as  he  did  when  it  took  him 
8  hours  to  do  it,  he  would  now  get  only  $2.12  for  the  same 
amount  of  work,  done  with  greater  exertion.  Viewed  from  this 
angle.  Air.  Gantt's  claim  that  "We  have  here  all  the  advantages 
of  day  work  combined  with  those  of  piece  work,  without  the 


92  SELECTED  ARTICLES 


TABLE  3 

Illustration  of 

Gantt's 

Bonus 

Plan 

Hours 

Compensation 

Lab 

or    Cost 

T 

0 

- 

'c 

u 

0 

indard 
tual 

^^  o 

V 

E 

3 

a 

a 

13 

V 

1^ 

IE 

M  O 

0 

0 

0 

0 

0 

■s 

C/J           < 

C/j 

H 

n 

H 

H 

Iz; 

H 

i-i 

A-Rate: 

Soc  per  h 

r. — Bonus 

:   (Miiiinuim)  20 

%   of  W 

age  for 

Standard 

rime 

4           8 

—4 

4  00 

.0 

4.00 

•  50 

4 

4.00           1 

00 

4            7 

—3 

3-50 

.0 

3-50 

•  50 

4 

3-50 

87  Va 

4           6 

2 

3-00 

.0 

300 

•  50 

4 

3-00 

75 

4           5 

1 

2.50 

.0 

2.50 

•  50 

4 

2.S0 

621/3 

4             4 

2.00 

.40 

2.40 

.60 

4 

2  40 

60 

4           3 

+  i 

1.50 

.90 

2.40 

.80 

4 

2.40 

60 

4                2 

+  2 

1. 00 

1.40 

2.40 

1.20 

4 

2.40 

60 

4            I 

4-3 

.50 

1.90 

2.40 

2.40 

4 

2.40 

60 

B-Rate: 

50c  per  h 

r. — Bonus 

(Maximum)   50 

%  of  Wage  for 

Standard 

Time 

4           8 

— 4 

4.00 

.0 

4.00 

•  so 

4 

4.00           1 

00 

4           7 

—  3 

3-50 

.0 

3-50 

•  SO 

4 

3-SO 

87^ 

4           6 

— 2 

300 

.0 

3-00 

•  so 

4 

3.00 

•J5,, 

4           S 

—  I 

2.50 

.0 

2.50 

•  50 

4 

2.50 

62^ 

4           4 

2.00 

1. 00 

3-00 

•  75 

4 

3.00 

75 

4           3 

+  1 

1.50 

1.50 

300 

1. 00 

4 

3-00 

•  75 

4           2 

+  2 

1. 00 

2.00 

3.00 

i^SO 

4 

3.00 

75 

4             I 

+  3 

•50 

2.50 

3-00 

300 

4 

3.00 

75 

disadvantage  of  either,''^  Is  hardly  sustained.  In  the  eyes  of  the 
worker  who  had  to  double  his  effort  to  bring  his  time  down 
from  8  to  4%  hours,  there  is  no  advantage  in  this  system  over 
the  straight  time  system  and  in  so  far  as  the  Gantt  system  has 
made  him  hustle  and  left  him  with  $2.12  for  his  effort,  instead 
of  $4.00  which  he  would  have  received  had  he  continued  to 
work  at  his  accustomed  easy  pace,  it  looks  like  a  deliberate 
scheme  to  hold  out  a  bait  which  is  just  beyond  his  reach,  and 
which  benefits  the  employer  exclusively. 

From  the  point  of  view  of  labor  costs,  the  Gantt  system  of 
payment  will  prove  of  great  advantage  to  the  employer,  for 
the  cost  per  unit  of  product  (see  Table  3)  will  be  reduced  from 
$1.00,  if  the  worker  did  his  task  in  8  hours,  to  62^c  if  it  took 
him.  only  5  hours. 

As  soon  as  the  worker  has  made  his  task,  his  payment  be- 
comes fixed.  In  our  illustration  it  equals  to  $3.00  for  4  hours. 
If  he  should  go  beyond  the  standard  and  gradually  reduce  his 
time  for  the  task  to  three,  two  or  one  hour,  he  would  continue 
to  receive  $3.00  for  the  task.  In  other  words, — from  the  moment 
he  meets  the  task  the  payment  becomes  a  straight  piece-rate  and 
his  earnings  per  hour  mount  as  he  gains  in  speed,  as  they  do 
under  any  piece-rate  system. 

»  H.  L.  Gantt,  Work,  Wages  and  Profits  (The  Engineering  Magazine 
Co.,   1919),  p.   165. 


PROBLEMS    OF    LABOR  93 

Turning  to  the  illustration  in  Table  3:  The  cost  per  unit  of 
product  when  the  task  is  achieved  is  75c.  As  the  workman  gains 
in  speed  beyond  that  point  his  earnings  rise  rapidly  from  75c 
per  hour  to  $3.00  per  hour.  It  must  be  borne  in  mind,  however, 
that  "the  task  is  based  on  a  detailed  investigation  by  a  trained 
expert  of  the  best  methods  of  doing  the  work"  and  that  in 
order  to  earn  bonus  the  work  must  not  only  be  done  in  standard 
time  or  better,  but  must  be  "up  to  the  standard  for  quality."^ 
Under  these  conditions,  it  is  very  seldom  that  the  worker  can 
beat  standard  time  very  materially  and,  therefore,  the  earnings 
above  $1.00  per  hour  as  worked  out  in  Table  3,  are  more  in 
the  nature  of  a  mathematical  illustration  of  what  the  earnings 
may  theoretically  rise  to,  rather  than  examples  of  practical 
reality.  There  is,  therefore,  not  likely  to  be  much  incentive  to 
further  speeding  after  the  worker  has  made  his  task. 

[As  viewed  by  Mr.  Gantt  himself,  his]  system  of  pay  is  really  a  com- 
bination of  the  best  features  of  both  day  and  piece  work.  The  work- 
man is  assured  his  day  rate  while  being  taught  to  perform  his  task,  and 
as  the  bonus  for  its  accomplishment  is  a  percentage  of  the  time  allowed, 
the  compensation  when  the  task  has  been  performed  is  a  fixed  quantity,  and 
is  thus  really  the  equivalent  of  a  piece  rate.  Our  method  of  payment 
then  is  piece  work  for  the  skilled,  and  day  work  for  the  unskilled,  it 
being  remembered  that  if  there  is  only  work  enough  for  a  few,  it  will 
always  be  given  to  the  skilled.  This  acts  as  a  powerful  stimulus  to  the 
unskilled,  and  all  who  have  any  ambition  try  to  get  into  the  bonus  class. 
....  The  day  worker  who  has  no  ambition  to  become  a  bonus  worker 
usually  of  his  own  accord  seeks  work  elsewhere,  and  our  working  force 
soon  becomes  composed  of  bonus  workers,  and  day  workers  who  are  try- 
ing to   become   bonus   workers.  ^ 

Of  course  it  would  be  impossible  to  discriminate  in  such  a 
way  between  one  set  of  workers  and  another  in  a  union  shop, 
the  union  usually  insisting  that  when  there  is  not  enough  work 
to  keep  everybody  busy,  work  must  be  divided  among  all  as 
equally  as  possible.  Still,  the  system  would  tend  ultimately  for 
the  best  workers  to  remain  at  the  plant. 

The  Emerson  Bonus  Plan,  in  the  words  of  the  author  of  the 
plan, 

Its  main  features  are  summed  up  by  its  author  under  the  follow- 
ing 3  heads : 

being  a  later  evolution  than  the  plans  of  Halsey,  Rowan,  Taylor  and 
Gantt,  had  the  benefit  of  their  experience,  owes  much  to  them,  but  also 
aimed  to  avoid  any  weaknesses  in  the  earlier  plans  and  to  add  valuable 
features    not   hitherto   included.  - 

I.  Efficiency  is  determined  not  for  each  operation  or  job,  but 
for  a  period  of  time,  such  as  a  day,  week  or  month. 

1  Ibid.,   1.    c,    p.    149- 

1  Ihid.,   1.   c,   p.    165 

2  Harrington  Emerson,  A  Comparative  Study  of  Wage  and  Bonus 
Plant,  p.   18. 


94  SELECTED  ARTICLES 

2.  Efficiency  is  expressed  in  the  form  of  a  percentage  ob- 
tained by  dividing  the  aggregate  standard  time  by  the  aggregate 
actual  time.  Thus,  if  the  total  number  of  hours  worked  in  a 
week  is  250  and  the  worker  has  delivered  260  hours  of  standard 
work,  his  efficiency  is  260  divided  by  250,  or  104%. 

3.  The  transition  from  inefficient  time  pay  to  standard  time 
and  bonus  is  made  not  abruptly,  as  under  the  Gantt  plan,  but 
gradually.  Bonus  begins  when  the  worker  reaches  67%  effi- 
ciency instead  of  100%,  as  under  the  Gantt  plan.  The  bonus  at 
67%  is  insignificant,  being  only  one  hundredth  of  one  per  cent 
of  the  hourly  wages  earned.  It  gradually  increases  by  fractions 
of  one  per  cent  until  it  equals  to  1%  at  74%  efficiency,  2%  at 
TJ%  efficiency,  3.3%  at  80%  efficiency,  10%  at  90%  efficiency. 
From  that  point  on,  the  bonus  increases  at  the  rate  of  i%  for 
each  additional  per  cent  efficiencj',  so  that  it  equals  20%  at 
100%  efficiency,  25%  at  105%  efficiency,  etc. 

In  other  words,  the  worker  is  paid  for  full  standard  time,  if 
he  does  the  work  in  less  than  standard  time,  in  addition  to  a 
bonus  of  twenty  per  cent.  Thus,  if  standard  time  for  perform- 
ing a  certain  operation  is  4  hours  (See  Table  4),  and  the 
hourly  rate  is  50c,  and  the  worker  has  accomplished  his  ta.sk 
in  three  hours,  showing  an  efficiency  of  133%,  his  compensation 
will  be  as  follows : 

3   hours  actual  time — 3   x   50.. $1.50 

1     hour     saved     from     standard  3    hours    actual    time — 3    x    50.. $1.50 

time   1   X   so    50  Bonus    53%,   on    3    hours    worked   or 

Bonus  20%  on  3  hours  worked  53%    of    $1.50 80 

—20%  of  $1.50 30  or:  

— Total      $2.30 

Total      $2.30 

making  the  total  earnings  per  hour  equal  $2.30  divided  by  3,  or 
77c.  This  plan  has  the  obvious  advantage  over  the  Gantt  plan 
that  by  avoiding  the  sudden  jump  from  no  bonus  when  work  is 
less  than  ioo%  efficient  to  a  bonus  of  from  20  to  50  per  cent, 
when  100%  efiiciency  is  attained,  it  docs  away  with  the  gamb- 
ling with  the  worker's  energy  and  ambition  and  offers  him  a 
gradually  increasing  reward  as  his  efficiency  advances  from  67% 
upward.  At  every  stage  of  improvement  beyond  67%  efficiency 
the  worker  is  encouraged  and  has  the  satisfaction  of  increasing 
his  hourly  earnings. 

As  already  stated,  the  Emerson  plan  provides  for  increasing 
efficiency  not  only  on  separate  jobs,  but  per  day,  week  or  month, 
while  the  Gantt  and  other  plans  have  the  job  as  a  basis.  This 
has  a  tendency  to  reduce  the  worker's  earnings  under  the  Emer- 
son plan,  since  it  is  impossible  to  maintain  as  high  a  rate  of 


PROBLEMS   OF  LABOR  95 

efficiency  continuously  as  it  is  on  separate  jobs;  the  figure  repre- 
senting aggregate  efficiency  is  thus  reduced,  reducing  the  aver- 
age hourly  earnings.  On  the  other  hand,  when  the  worker  dis- 
covers this,  he  will  realize  that  overspeeding  on  individual  jobs, 
causing  exhaustion  and  lowered  efficiency  on  subsequent  jobs, 
brings  a  lower  aggregate  income  than  a  more  moderate  efficiency 
steadily  maintained.  This  should  furnish  the  best  corrective 
against  undue  speeding. 

From  the  point  of  view  of  labor  cost,  the  Emerson  plan  is 
like  the  Halsey  and  Rowan  in  that  it  provides  for  a  constantly 
reduced  cost  per  unit  of  product  as  the  efficiency  of  the  worker 
and  his  earnings  per  hour  increase  while,  under  the  Gantt  plan 
the  cost  remains  the  same  after  the  worker  reaches  and  passes 
100%  efficiency. 

[As  Mr.  EtnerGon  says]  "An  employer  can  well  afford  to  pay  a  large 
bonus;  he  can  well  give  the  total  wages  saved  as  bonus  and  derive  his  own 
benefit  from  the  increased  output  of  the  plant  and  the  greatly  reduced 
overhead.  It  is  for  this  reason  that  for  efficiencies  above  ioo%  the  worker 
is  given  as  a  bonus  his  hourly  rate  for  all  the  time  he  saves  in  addition 
to   20%    on   the   wages   for   the   time   he   works.  ''- 

In  Spite  of  that,  the  labor  cost  per  unit  of  product  continues 
to  drop  under  the  Emerson  plan  after  the  worker  has  exceeded 
ioo%  efficiency.  Thus  in  the  illustration  in  Table  4  at  50% 
efficiency  the  labor  cost  to  the  employer  per  unit  uf  product  is 
$1.00;  at  66^9o  efficiency  the  cost  drops  to  75c;  at  100%  effi- 
ciency the  cost  is  reduced  to  60c ;  at  200%  efficiency  it  goes  down 
to  55c,  and  so  on.  At  the  same  time  the  worker's  hourly  earn- 
ings advance  from  50c  to  52c,  60c  and  $1.10. 

^  Ibid,    1.    c,    p.     19. 

TABLE  4 
Illustration  of  Emerson's  Bonus  Plan 
Rate:  50c  per  hr.  Bonus:  Commencing  with  one-hundredth  of  1%  for 
67%  efficiency,  it  rises  to  3.3%  for  80%  efficiency;  to  10%  for  90% 
efficiency;  and  thereafter  increases  at  the  rate  of  1%  for  each  1%  in- 
crease of  efficiency,  so  that  it  is  20%  at  100%  efficiency;  25%  at 
105%    efficiency,    etc. 

Hours  Compensation  Labor  Cost 


•a 

a 

a  'u 

V 

V 

2 

c 

in 

"  u 

n  3 

a  0 

Wffi 

u 

0 

CS 

*-'  3 

-0 

c 
a 

3 
0 

s 

3 
0 

E 

0 

—  u. 

sS 

0 

°2 

•Ph 

in 

< 

fin 

H 

^ 

< 

H 

H 

H 

^ 

U 

4 

8 

.■;o% 

4.00 

0 

0 

4.00 

•SO 

4.00 

4 

1. 00 

4 

7 

57f° 

3-50 

0 

0 

3-50 

•SO 

3-SO 

4 

.87 

4 

6 

66%% 

300 

0 

0 

3.00 

•SO 

7.00 

4 

•  75 

4 

S 

80% 

2.50 

3.3% 

0.08 

2.58 

•S2 

2.58 

4 

.65 

4 

4 

100% 

2.00 

20% 

0.40 

2.40 

.60 

2.40 

4 

.60 

4 

3 

133% 

1.50 

53% 

0.80 

2.30 

■  77 

2.30 

4 

•S8 

4 

2 

200% 

1. 00 

120% 

1.20 

2.20 

1. 10 

2.20 

4 

•  SS 

4 

I 

400% 

•  SO 

320% 

1.60 

2.10 

2.10 

2.10 

4 

•52 

g6  SELECTED  ARTICLES 

Conclusion 

Each  of  the  systems  of  compensation  mentioned  has  its  ad- 
vantages and  disadvantages  and  the  adoption  of  one  or  the 
other  will  depend  upon  the  aim  in  view. 

Whatever  the  system  adopted,  assuming  that  the  object  is 
to  adopt  a  system  of  compensation  that  will  secure  efficiency 
without  overspeeding;  that  will  tend  to  keep  down  costs,  while 
raising  wages;  and  that  will  appeal  to  the  sense  of  fairness  of 
the  worker,  certain  general  principles  suggest  themselves  for 
our  guidance : 

1.  The  workman  is  entitled  to  a  living  wage  as  a  minimum 
compensation  for  his  time  and  effort  which  he  spends  at  the 
plant.  Whatever  the  form  of  compensation,  he  must  receive 
a  basic  wage  measured  by  the  time  he  spends  at  the  plant,  at  a 
rate  sufficient  to  yield  a  living  wage. 

2.  If  workers  are  not  to  be  prejudiced  against  any  system 
of  compensation  based  on  output  (whether  piece-rate  or  bonus) 
they  must  be  paid  the  basic  hourly  rate  for  all  idle  time  spent 
at  the  plant  through  no  fault  of  their  own. 

3.  If  workers  are  paid  by  the  piece,  the  rates  must  be  so 
adjusted  as  to  yield  the  worker  a  distinctly  higher  wage  (from 
20%  to  50%)  than  the  minimum  wage  paid  the  worker  of 
ordinary  speed  and  skill. 

4.  Where  time  and  bonus  rates  are  paid,  they  should  be  so 
arranged  as  not  to  rob  the  worker  of  the  fruits  of  his  extra 
exertion  on  the  one  hand,  and  to  discourage  excessive  speeding 
on  the  part  of  the  worker  beyond  what  has  been  demonstrated 
as  safe  by  careful  time  studies;  excessive  speed  being  harmful 
to  the  health  of  the  worker  and  to  the  quality  of  the  product. 

5.  Brief  rest  periods  in  addition  to  the  noon  recess,  or 
frequent  changes  of  position  in  receiving  and  turning  in  work, 
should  be  provided  to  avoid  undue  fatigue  and  monotony.  This 
will  safeguard  the  health  of  the  workers  and  in  the  end  result 
in  increased  output. 

6.  Under  no  circumstances  .should  piece  or  bonus  rates  be 
cut  on  the  ground  that  the  earnings  of  the  workers  are  too  high 
so  long  as  there  is  no  change  in  the  operation  or  in  the  manu- 
facturing process. 

7.  If  the  opposition  of  workers  to  new  machinery,  or  im- 
proved labor-saving  methods,  due  to  fear  of  losing  the  job,  is 
to  be  overcome,  employes  made  superfluous  must  never  be  dis- 


PROBLEMS    OF   LABOR  c; 

charged.  Ordinarily,  the  growth  of  the  business,  the  natural 
labor  turnover,  and  the  possibility  of  transfers  to  other  de- 
partments, will  take  care  of  the  superfluous  workers.  If  these 
should  fail  to  materialize  as  rapidly  as  may  seem  desirable,  it 
will  be  cheaper  in  the  long  run  to  employ  the  workers  on  their 
jobs  on  part  time,  paying  full  time  wages,  than  to  show  indif- 
ference to  the  employe's  fate  by  "firing"  him  unceremoniously. 
8.  The  worker  should  share  in  the  benefits  resulting  from 
the  introduction  of  improved  machinery  and  increased  efficiency. 
Whether  this  share  should  take  the  form  of  higher  wages, 
shorter  hours,  or  a  share  in  the  general  profits,  or  in  the  specific 
savings  resulting  from  the  improvements,  is  a  subject  so  large 
as  to  require  separate  treatment. 


STRETCHING   THE    PAY    ENVELOPE' 

Some  Nezv  Methods  of  Fixing   Wages 

One  of  the  paradoxes  of  the  war  is  the  stimulus  it  is  giving 
to  human  conservation.  Witness  the  awakening  in  Great  Britain 
to  the  inefficiency  of  overwork  as  proven  by  the  reports  of  the 
Committee  on  the  Health  of  Munition  Workers,  and  as  indi- 
cated by  Lord  Leverhulme's  advocacy  of  a  six-hour  day.  The 
United  States  has  been  at  war  nine  months  as  against  Eng- 
land's three  and  one-half  years,  but  the  same  motives  that 
created  a  new  attitude  there  toward  the  well-being  of  the  work- 
ers have  been  active  here  since  the  struggle  in  Europe  began. 

Two  employment  managers  for  large  corporations  stated 
the  case  for  me  not  long  ago.  One  of  them  was  in  a  state  of 
nerves  when  I  called  on  him.  He  snorted  at  my  questions. 
There  was  nothing  to  tell  me.  Anybody  ought  to  know  what 
the  job  of  an  employment  office  is.  They  were  doing  the  only 
thing  anybody  did — "hustling  for  men."  And  he  turned  his  back 
on  me.  The  other  man  was  more  of  a  philosopher.  "The  func- 
tion of  an  employment  department,"  he  told  me,  "is  to  keep 
men  from  quitting." 

Both  men  really  told  the  same  story.  Men  are  not  so  easy 
to  get  as  in  the  days  before  the  war,  when  immigrants  were 
entering  our  doors  at  the  rate  of  a  million  a  year.  At  the 
same   time   our   industries   are   expanding  and   the   demand    for 

^  By   John    A.    Fitch.      Survey.      39:411-13.      January    12,    1918. 


98  SELECTED  ARTICLES 

men  is  increasing.  It  is  a  time  when  employment  managers 
are  hustling  for  men  and,  after  they  get  them,  praying  that 
they  won't  quit.  The  situation  was  admirably  summed  up  at 
the  Safety  Congress  last  fall,  when  a  representative  of  one  of 
the  railroads  expressed  amazement  at  the  idea  of  discharging 
men  who  disobeyed  safety  rules.  "Any  safety  man  on  our 
railroad,"  he  declared,  "who  recommended  firing  a  man  would 
get  fired  himself." 

The  situation  before  the  employers  of  the  country  is  not  a 
new  one.  They  have  had  trouble  before  in  getting  men,  and 
there  is  always  trouble  about  keeping  them.  But  the  old  situa- 
tion has  been  greatly  intensified  in  many  industries  by  the  war. 
It  is  a  commonplace  among  employers  that  when  labor  is  scarce 
and  wages  are  high  the  tendency  of  workingmen  to  drift  about 
is  greatly  increased.  It  is  also  a  well-known  fact  that  under 
such  conditions  men  are  not  regular  in  their  attendance  at 
work.  They  take  a  day  off  when  they  feel  like  it,  secure  in 
the  moral  certainty  that  their  jobs  will  be  waiting  for  them 
when  they  go  back. 

Old  though  the  difficulty  is,  good,  hard,  constructive  think- 
ing about  it  is  comparatively  new.  But  now  some  of  the  keen- 
est minds  in  the  industrial  world  are  at  work  on  the  task. 
Under  the  pressure  of  industrial  necessity  in  war  time  more 
thought  is  being  given  to  the  welfare  of  wage-earners  than 
in  any  previous  time  in  the  nation's  history.  The  question  is 
how  to  get  and  keep  men,  and  the  answer  so  obviously  lies  in 
the  degree  to  which  m.en  are  satisfied  with  the  conditions  of 
their  work  that  it  is  a  wonder  no  one  has  thought  of  it  before. 
If  the  wage-earner  is  to  be  kept  on  the  job,  means  must  be 
taken  to  make  the  job  worth  while. 

The  most  obvious  need  of  the  wage-earner  is  an  adequate 
wage.  The  first  question  of  an  applicant  for  work  is  what 
will  the  job  pay.  More  unrest  is  provoked  and  more  strikes 
occur  over  tlic  wage  question  than  over  any  other  one  thing. 
In  attempting  to  attract  labor  and  create  satisfaction  at  a 
time  when  prices  of  necessities  are  mounting  to  unheard  of 
levels,  it  is  clear  that  attention  must  be  directed  first  toward 
the  adequacy  of  the  wages  scale. 

Since  the  beginning  of  the  war  various  methods  of  wage 
adjustment  have  been  put  to  the  test.  Many  corporations 
adopted  the  war  bonus  idea.  They  took  the  view  that  the 
outlook  was  too  uncertain  to  justify  a  permanent  advance;  if 
affairs  took  a  bad  turn  it  would  be  much  easier  to  discontinue 


PROBLEMS   OF   LABOR  gg 

the  bonus  than  to  reduce  wages.  In  order  to  emphasize  the 
difference  between  the  regular  wages  and  the  bonus,  the  latter 
is  paid  at  more  infrequent  intervals,  in  some  cases  monthly, 
in  others  quarterly,  sometimes  in  a  lump  at  the  end  of  the  year. 

The  bonus  plan  as  a  method  of  relieving  the  pressure  of 
the  high  cost  of  living  is,  of  course,  subject  to  the  same  diffi- 
culty that  affects  any  other  method — if  it  is  not  accurately 
based  on  the  actual  increase  in  costs,  it  will  not  allay  unrest. 
There  is  a  special  objection,  also,  due  to  the  traditional  opposi- 
tion of  organized  labor  to  bonus  schemes  of  all  sorts.  They 
object  to  a  war  bonus  for  precisely  the  reason  that  leads  em- 
ployers to  fa\-or  it — the  ease  with  which  wages  can  be  reduced 
when  a  slump  comes.  The  United  Mine  Workers  succeeded 
in  practically  eliminating  war  bonuses   from  coal  mining. 

There  have  been  impressive  increases  in  money  wages  in  all 
industries.  Many  corporations  have  disregarded  the  danger 
involved  and  have  raised  the  scale  of  payments  as  if  present 
conditions  were  to  be  permanent.  At  periodic  intervals  one 
reads  of  another  advance  and  yet  another  and  then  another  on 
top  of  tliat,  until  the  impression  gets  abroad  that  the  working 
people  of  the  country  are  rolling  in  wealth. 

To  judge  of  the  meaning  of  such  advances  one  needs  to 
check  them  up  against  the  increase  in  the  cost  of  living.  Per- 
haps the  most  illuminating  example  is  the  United  States  Steel 
Corporation.  Repeatedly  during  the  last  two  years  the  cor- 
poration has  increased  the  wages  of  its  employes,  each  time 
by  10  per  cent.  Three  times  in  1916  such  increases  were  an- 
nounced, taking  effect  on  February  i,  May  i  and  December  15 ; 
and  twice  in  191 7,  on  May  i  and  October  i.  This  makes  an  in- 
crease of  over  60  per  cent  in  a  period  of  twenty-one  months, 
a  rate  of  advance  almost  without  precedent. 

Wages  Lagging  Behind  Food 

The  significance  of  this  action  can  be  gauged  only  by  plac- 
ing alongside  of  it  the  figures  of  advanced  living  costs.  The 
Annalist  publishes  every  week  a  chart  on  which  is  plotted  the 
curve  of  the  wholesale  price  of  twenty-five  principal  food  prod- 
ucts. The  index  number  given  on  this  chart  for  February  I, 
1916,  was  157.     For  October  i,  1917,  it  was  280. 

The  fact  that  in  the  same  period  of  time  wholesale  prices 
of  food  advanced  123  per  cent  while  wages  rose  only  60  per 
cent  does  not  indicate  that  the  rise  in  the  cost  of  living  has 
been  twice  as  rapid  as  the  increase  in  the  wages  of  steel  work- 


loo  SELECTED   ARTICLES 

ers.  Rent  is  one  of  the  most  important  of  factors  entering 
into  living  costs  and,  in  general,  rents  have  not  gone  up  as 
rapidly  nor  proportionately  as  high  as  food  prices.  Other  fac- 
tors entering  in  do  not  show  so  rapid  an  advance.  Neverthe- 
less, when  wholesale  prices  of  food  go  up  twice  as  fast  as 
wages,  it  is  safe  to  assume  that  the  wage-earner's  income  has 
lagged  behind  in  the  race  with  his  necessities.  It  is  clear,  there- 
fore, that  wage  increases  in  themselves  are  not  sufficient  to 
maintain  the  worker  in  statu  quo.  They  must  advance  pari 
passu  with  the  movement  in  the  cost  of  living  if  he  is  not  to 
be  ^\orse  off  than  before. 

Since  the  war  began,  there  has  arisen  a  new  method  in  wage 
payments.  The  plan  is  to  establish  a  wage  system  that  will 
rise  automatically  with  the  cost  of  living.  The  Oneida  Com- 
munity, Ltd.,  adopted  a  bonus  plan  two  years  ago,  basing  the 
extra  payment  on  Bradstreet's  index  figures.  Each  month  every 
employe  rated  at  $2,000  or  less  receives  in  addition  to  his  regu- 
lar pay,  a  "High  Cost  of  Living  Envelope."  Its  contents,  based 
on  Bradstreet's  figures,  fluctuate  with  the  changes  in  prices. 
Thus,  in  January,  191 7,  the  envelope  contained  an  additional  16 
per  cent  based  on  the  regular  wages  and  in  December,  191 7, 
the  bonus  was  32.75  per  cent. 

A  similar  method  is  used  by  the  Kelley-How-Thomson  Com- 
pany of  Dulutli,  and  l)y  the  George  Worthington  Company  of 
Cleveland,  botli  in  the  wholesale  hardware  business. 

To  trade  imionist  these  plans,  since  they  are  pure  bonus 
schemes,  would  doubtless  be  objectionable.  It  must  be  recog- 
nized, though,  that  these  plans  are  quite  different  from  the 
ordinary  bonus  idea.  They  represent  a  distinct  effort  to  make 
the  wage  scale  expand  in  direct  proportion  to  the  changes  in 
the  cost  of  living.  But  like  the  other  bonus  plans,  the  arrange- 
ment can  be  revoked,  without  any  actual  cut  in  wages  appearing 
to  take  place. 

More  interesting,  therefore,  are  the  plans  that  have  been 
adopted  within  the  last  year  and  a  half  by  two  large  employing 
companies,  one  in  Detroit  and  the  other  in  Syracuse,  N.Y. 

In  1916  the  Solvay  Process  Company  in  Detroit  was  hav- 
ing difficulty  in  keeping  men.  After  some  investigation,  it  was 
decided  that  the  chief  difficulty  was  with  the  wages.  Conse- 
quentl}-,  after  conducting  a  study  of  the  cost  of  living,  the  com- 
pany made  an  estimate  of  the  minimum  cost  of  living  for  a 
family  of  standard  size  and  then  raised  wages  to  that  point. 
Immediately  the  groceries  and  other   stores  in  the  vicinity  of 


PROBLEMS    OF   LABOR  loi 

the  plant  put  up  their  prices  so  as  to  absorb  all  of  the  in- 
creased wages.  The  company  then  started  a  grocery  store  of 
its  own  and  sold  to  its  employes  at  cost.  With  this  beginning 
a  continuous  check  is  now  being  made  on  changes  in  the  cost 
of  living.  Two  men  on  the  staff  of  the  employment  manager 
devote  themselves  exclusively  to  this  task.  They  have  about 
one  hundred  families  who  are  keeping  careful  accounts  of  their 
expenditures  on  forms  provided  by  the  company.  Checked 
against  these  figures  is  an  estimate  made  by  a  local  hospital  of 
the  cost  of  necessary  rations  on  a  scientific  basis.  Government 
figures  are  also  used.  With  these  as  a  basis,  it  was  decided 
last  summer  that  a  minimum  living  wage  should  yield  $1,200  a 
year.  Accordingly  the  wage  rate  was  so  adjusted  as  to  pro- 
vide, with  overtime  and  bonus,  a  minimum  income  of  $100  a 
month. 

With  a  similar  desire  to  establish  a  wage  rate  that  would 
have  some  relation  to  the  cost  of  living,  the  Franklin  Auto- 
mobile Company  made  a  study  early  in  1916  of  the  cost  of 
living  in  the  neighborhood  of  its  plant  in  Syracuse,  N.Y.  The 
year  1905  was  taken  as  a  base  for  determining  what  an  ade- 
quate wage  should  be  in  1916,  because  the  records  showed  that 
they  had  an  unusually  low  labor  turnover  that  j^ear,  indicating 
that  the  workers  were  satisfied  with  the  conditions  then  pre- 
vailing. A  study  was  made  to  discover  the  extent  to  which 
the  cost  of  necessities  has  risen  since  1905,  and  this  was 
checked  against  the  actual  expenditures  in  1916  of  a  large 
number  of  families  in  which  the  wage-earner  was  a  Franklin 
employe.  As  a  result  of  this  investigation  a  very  elaborate 
formula  was  worked  out  for  determining  the  wages  that  should 
be  paid.  Provision  was  made  for  a  continuous  study  of  the 
cost  of  living,  and  the  plan  calls  for  a  revision  of  wages  every 
three  months  in  order  to  maintain  the  proper  relation  to  the 
movement  of  costs. 

One  of  the  items  that  went  into  the  formula  at  the  Franklin 
plant  was  a  figure  representing  the  length  of  service.  For 
each  year  of  service,  2>^  per  cent  of  the  base  rate  is  added  to 
the  wage.  This,  according  to  George  D.  Babcock  of  the  Frank- 
lin Company,  who  wrote  of  it  in  Industrial  Management,  was 
to  pay  "for  the  loyalty  which  develops  in  employes  who  have 
been  long  in  service,  for  the  historical  knowledge  which  they 
have,  for  the  esprit  de  corps  which  comes  through  long  periods 
of  association  with  men,  as  well  as  for  a  reduction  in  the 
frequency  of  labor  turnover." 


102  SELECTED    ARTICLES 

Making  Money  Worth  More 

Employing  corporations  are  beginning  to  realize  that  con- 
tinuous service  is  worth  paying  for.  Sears,  Roebuck  &  Co. 
in  Chicago  add  2  per  cent  to  a  man's  wages  after  he  has  been 
in  their  employ  two  years,  and  after  that  I  per  cent  is  added 
each  year  up  to  ten  years  of  service.  This  plan  is  being  adopted 
widely,  and  since  it  is  in  addition  to  any  other  increase  in 
wages  that  there  may  be,  it  provides  a  real  incentive  to  remain 
in  the  employ  of  the  company. 

Another  method  having  in  view  the  stretching  of  the  pay 
envelope  to  cover  the  cost  of  living,  which  has  the  added 
advantage  of  costing  the  employer  less  than  an  increase  in 
wages,  involves  various  attempts  to  increase  the  purchasing 
power  of  the  wage-earner's  money.  Throughout  the  Middle 
West  the  establishment  of  grocery  stores  in  a  space  provided 
by  the  plant,  and  in  which  the  employes  can  purchase  goods 
at  cost,  is  becoming  quite  general.  Employers  recognize  that 
the  establishment  of  lunch-rooms  where  food  is  furnished  at 
cost,  or  close  to  cost,  has  the  same  advantage  and,  of  course, 
in  addition  to  that  it  has  the  advantage  of  providing  a  sanitary 
dining  room  and  good  hot  food,  the  effect  of  which  is  marked 
on  the  wage-earner's  health  and  consequently  on  his  efficiency. 

The  effect  of  the  wai  on  wages  can  hardly  be  considered  an 
evidence  of  increased  recognition  either  of  the  rights  or  the 
needs  of  labor,  because  in  general,  however  great  the  increase 
in  money,  real  wages  have  probably  declined.  It  is  an  encour- 
aging sign,  however,  when  two  large  employing  corporations 
like  the  Franklin  Company  and  the  Solvay-Process  recognize 
so  clearly  their  obligation  to  paj^  a  living  wage  that  they  are 
unwilling  any  longer  to  leave  the  determination  of  the  amount 
to  the  blind  law  of  supply  and  demand.  And  the  effect  of  the 
movement  thus  begun  will  outlive  the  war. 


WAGES    AND    SOME    INDUSTRIAL 
FALLACIES' 

Our  present  critical  condition  in  industry  is  due  almost 
wholly  to  labor's  new  self-assertion.  It  is  hardly  necessary  to 
enter  into  the  many  reasons  for  this  new  self-assertion  of  labor. 
We   know   its   sudden   growth   has   been   fostered   by  the   war. 

^  By    Willis    Wisler.      American    Federationist.      26:1036-40.      Xovember, 
1919. 


PROBLEMS    OF   LABOR  103 

Great  emergencies  have  a  levelling  effect ;  artificial  barriers  can 
not  stand  up  at  such  times.  It  is  not  so  much  what  labor  has 
done  that  disturbs  employers  as  what  it  is  emboldened  to  suspect. 

Under  autocracy  this  new  mood  of  challenge  must  lead  to 
some  form  of  protest.  The  caste  that  strives  to  impose  its 
control  upon  labor  must  either  justify  itself  by  leadership,  it 
must  stand  aside,  or  it  must  establi.«h  itself  by  violence. 

The  musket  made  the  medieval  peasant  more  deadly  than 
his  lanced  and  plumed  overlord,  and  by  this  fact  it  marked 
the  passing  of  a  social  order.  Trained  intelligence  may  be 
now  about  to  repeat  the  event. 

If  rule  by  caste,  high  or  low,  shall  ever  come  upon  the 
United  States  it  can  only  be  by  the  creation  of  caste  lines  im- 
posed by  an  ill-advised  industrial  Bourbonism.  The  degree  of 
fear  an  employer  of  men  expresses  concerning  the  menace  of 
"radicalism"  in  this  country  is  a  fair  index  of  his  real  auto- 
cratic intent  and  ideals. 

Men,  however,  who  are  familiar  with  the  spectacle  of  their 
fellows  rising  from  the  ranks  of  wage-earners  to  places  of  the 
highest  affluence  and  esteem,  can  have  no  intention  to  tear  down 
the  golden  ladder  of  opportunity.  The  most  passing  compari- 
son must  show  the  very  real  differences  between  our  conditions 
and  those  of  Europe.  The  very  elements  making  for  success 
of  radicalism  abroad  are  until  now  happily  lacking  here. 

There  is,  however,  a  condition — though  not  a  fact — of  caste 
that  threatens.  It  grows  out  of  a  shrewd  though  perhaps  mis- 
taken conviction  on  both  sides  that  solidarity  is  the  best  pro- 
tection. 

While  the  American  is  a  wage-earner  he  senses  the  advan- 
tages he  has  in  collective  bargaining.  In  solidarity  he  sees  his 
defense  against  the  monopoly  of  jobs  in  the  hands  of  the  em- 
ployers. 

The  employer,  too,  compels  solidarity  so  far  as  he  can  by 
keeping  labor  in  the  "laboring  class."  He  must  look  with  scant 
favor  on  his  employe  climbing  out  of  the  wage  and  vocational 
limitations  he  has  tried  to  fix  at  the  hiring  moment. 

Yet  both  violate  solidarity  when  opportunity  offers.  The 
wage-earner  becomes  an  employer  if  he  can  do  so.  The  em- 
ployer recruits  his  executives  necessarilj',  for  the  most  part, 
"from  the  ranks."  Thus  with  us  "solidarity"  in  the  old  world 
sense  is  a  technique  of  industrial  strategy'  rather  than  a  social 
fact  that  can  be  physically  perpetuated. 


104  SELECTED   ARTICLES 

Behind  this  technique  of  industrial  strategy  is  functioning 
a  bread  and  butter  philosophy.  Perhaps  it  were  better  to  say 
a  "bread  and  butter  opportunism."  Organized  labor  in  America 
is  essentially  pragmatic;  it  gets  all  it  can  whenever  it  can.  I 
am  speaking  now  as  a  layman.  I  shall  surely  not  attempt  to 
speak  for  organized  labor.  But  there  has  certainly  been  no 
stampede  to  any  philosopho-political  program  such  as  we  are 
fond  of  attributing  to  English  labor. 

Here  in  America  we  are  transients  in  labor — at  least  we  so 
love  to  assume.  We  require  no  political  upheaval  to  break  our 
way  through  economic  barriers.  We  ask  only  to  be  decently 
comfortable  and  self-respecting  while  wc  tarry  at  the  bench 
or  at  the  machine.  Only  men  reconciled  to  no  escape  by  in- 
dustrial effort  grow  urgent  and  evolve  philosophies. 

It  is  our  good  fortune  to  represent  in  the  eyes  of  the  world 
of  labor  that  best  standard.  When  American  wages  and  stand- 
ards of  working  and  of  living  conditions  shall  have  become — 
through  international  knowledge — world  standards,  the  day  of 
American  exploitation  of  foreign  labor  and  the  American  use 
of  foreign  labor  as  American  labor's  competitor  will  have 
passed.  The  fortunes  of  American  industry  must  rest  on  some 
other     basis  tiian  the  misfortune  of  any  group  of  workers. 

For  the  accomplishment  of  this  great  project,  the  world  en- 
franchisement of  labor,  the  machineiy  is  now  in  the  making. 
An  international  labor  congress  can  concentrate,  by  centraliza- 
tion, the  energies  and  intelligence  of  labor.  Universality  of 
knowledge  will  level  up  the  workers  of  all  nations.  And  for 
this  project  .America  is  well  fitted  to  furnish  the  sanest  leader- 
ship— a  leadership  which  it  will  be  hoped  will  not  attempt  to 
create  a  fictitious  dignity  of  labor  by  the  perpetuation  of  a 
caste,  but  which  will  insist  on  decent  living  and  unobstructed 
opportunity  for  wage-earners  on  the  sole  basis  of  their  being 
human  beings. 

All  that  sincere  persons,  who  differ  in  opinion,  need  do  to 
come  to  agreement  is  to  argue  their  differences  suftlciently.  The 
reason  most  controversies  end  in  protracted  antagonism  is  that 
they  have  not  been  carried  to  the  essential  limits  of  definition — 
the  coincidence  of  meaning  in  the  fact  has  not  been  reached. 

One  of  the  commonest  faults  is  classification  by  coincident 
phenomena.  A  good  illustration  of  this  is  the  resentment  of 
organized  labor  against  the  physical  examinations  of  new  em- 
ployes. Physical  examinations  of  applicants  has  been  some- 
times used  by  employers  or  their  agents  to  exclude   so-called 


PROBLEMS    OF   LABOR  105 

"trouble  makers."  Therefore,  physical  examination  of  new  em- 
ployes needs  to  be  abolished?  Surely  we  are  capable  of  better 
reasoning  than  that.  It  is  not  the  physical  examination  that  is 
bad,  but  the  misuse  of  this  sound  precaution  for  discriminatory 
purposes. 

Tins  kind  of  loose  reasoning  has  done  much  harm.  It  seems 
as  though  tins  kind  of  reasoning  has  placed  organized  labor 
at  a  disadvantage  with  regard  also  to  industrial  representation. 
Tiic  condcmnaiion  by  org.inized  labor  should  have  been  not 
against  industrial  representation,  because  much  of  it  is  specious, 
but  it  should  ha\e  been  against  the  obstruction  of  absolute 
freedom  of  suffrage  and  agamst  the  sinister  emasculation  of  its 
legislative  function. 

The  real  ground  for  objection  by  American  organized  labor 
to  industrial  representation  is  better  indicated  in  its  reference 
to  these  industrial  representation  plans  as  "Company  or  Em- 
ployer Unions."  It  is  fairly  evident  that  organized  labor  has 
all  along  felt  sure  of  an  essential  insincerity  on  the  part  of 
American  employers. 

The  American  Federation  of  Labor,  it  seems,  fears  that 
once  American  organized  labor  has  been  disorganized  and 
rendered  pliant  b}'  the  quasi  liberality  of  industrial  representa- 
tion plans  outside  of  unions,  then-  so  say  the  leaders  of  organ- 
ized labor — the  wage-earner  will  again  find  himself  alone  and 
stripped  of  his  defenses  in  the  perpetual  wage  war. 

This  may  be  so,  but  it  might  well  work  the  other  way. 
Company  unions,  subjected  to  oppression,  might  well  make 
common  cause  with  other  company  unions  in  their  industry  and 
so  again  coalesce  into  a  national  organization  with  its  hands 
well  trained  and  gripping  the  very  vitals  of  their  industries. 

Organized  labor  might  well  give  this  possibility  its  closest 
thought.  By  capturing  all  genuine  works  committees  and  de- 
stroying the  rest  it  would  have  gained  access  to  the  essentials 
of  wages,  hours,  working  conditions,  and  to  economic  policies 
through  a  door  which  the  emploj'er  himself  has  opened  to  la- 
bor. Thus,  organized  labor  might  recoup  the  poor  strateg\' 
which  let  employers  strip  its  crafts  of  their  monopoly  of  that 
trade  skill  which  employers,  by  experts  and  research  and  vesti- 
bule schools,  have  shrewdly  made  their  property.  In  the  re- 
sultant spectacular  rise  of  the  semi-skilled — the  great  menace 
to  craft  unionism — should  have  been  read  the  ominous  hand- 
writing on  the  wall. 

Organized  labor  may   be   distrustful  of   the  employer's  dis- 


io6  SELECTED   ARTICLES 

position  to  respect  the  rights  of  his  employe,  but  they  seem  to 
be  no  less  distrustful  of  the  employe's  ability  to  safeguard  his 
rights.  The  employer,  they  say,  has  access  to  experts — trained 
men  to  advise  him.  Why,  then,  shall  the  employe  be  denied  a 
like  opportunity  to  avail  himself  of  the  organized  skill  the 
unions  can  supply  to  him?  Merely  to  enfranchise  a  v^'orker 
does  not  automatically  endow  him  with  political  competency. 
To  elevate  him  to  the  office  of  works  representative  docs  not 
assure  to  his  associates,  ipso  facto,  adequate  representation. 
But  let  us  bear  in  mind  that  this  initial  inexperience  will  pass 
with  time  and  use  and  that  employers  may  find  themselves  in 
time  matched  eye  to  eye  with  men  who  can  effectively  demand 
from  them  genuine  leadership  or  retirement. 

The  facile  assumption  of  the  equality  of  labor  and  capital, 
of  employe  and  employer,  is  prima  facie  untenable.  If  this 
were  true  there  would  hardly  be  employes.  Nor  are  their  in- 
terests at  all  so  mutual  as  our  popular  platitude  would  assume. 
There  is,  to  be  sure,  a  common  interest  in  the  creation  of 
wealth,  but  in  its  distribution  there  can  be  little  of  mutuality. 
Until  some  equitable  distribution,  accepted  on  both  sides,  by  a 
common  conipromise  agreement  or  because  of  an  inescapable 
accuracy  of  apportionment,  this  distribution  must  be  governed 
by  the  relative  strength  and  the  effective  force  applied  on  each 
side. 

Managerial  skill  at  the  point  where  planning  meets  produc- 
tion is  the  supreme  strategic  point  in  future  industry.  The 
forces  which  shall  control  the  production,  executives  who 
directly  supervising  labor,  translate  plan  into  product,  are  the 
forces  that  can  control  industry.  Employers  already  have 
sensed  this  and  they  are  hastening  to  bind  to  them  these  minor 
executives  by  developing  foremen's  training  courses. 

It  is  about  this  participation  in  management  and  in  the  divi- 
sion of  the  wealth  produced  in  the  industry  that  the  impending 
industrial  contest  must  revolve.  Profit  sharing  can  not  satisfy 
this  contest.  The  fallacy  of  profit  sharing  lies  deeper  than  its 
mistaken  psychology,  deeper  than  its  inconsistency  in  not  shar- 
ing deficits,  deeper  than  its  assessing  on  the  worker  in  reduced 
dividends  losses  usually  beyond  the  effect  of  his  individual  enter- 
prise and  industry;  it  lies  in  an  intrinsic  dishonesty.  Many  em- 
ployers, moved  by  the  most  honest  intention,  have  been  per- 
plexed at  the  general  and  apparently  increasing  distaste  among 
their  employes  for  profit  sharing  systems. 

In  large  measure  this  disfavor  rests  in  an  instinctive  resent- 


PROBLEAIS    OF   LABOR  T07 

ment  against  the  assumption  by  the  employer  in  such  plans  of 
priority  of  claim  on  all  surplus  over  the  cost  of  production. 
The  employer  by  granting  profit  sharing  takes  credit  for  a  spe- 
cial virtue.  To  the  laborer  this  must  often  smack  of  that 
benevolence  of  the  robber  who  graciously  makes  to  his  victim 
a  gift  from  part  of  the  spoils. 

There  are  arguments  for  deferred  wages,  but  for  profit 
sharing— except  under  a  real  partnership— none  that  are  eco- 
nomically sound.  The  conviction  of  the  worker  that  wages 
have  been  curtailed  to  effect  the  dividend  is,  so  far  as  the  eco- 
nomic fact  is  concerned,  a  correct  view.  That  such  is  the  in- 
tention of  the  employer— either  to  cover  poor  management  or 
to  keep  down  the  current  wage  scale — may  sometimes  be  true. 
But  even  if  it  were  not  true  the  fact  would  remain  that  any 
:ittempt  to  solve  the  wage  problem  by  a  "profit-sharing  system" 
is  clear  proof  of  a  complete  misconception  of  the  meaning  of 
wages. 

Adam  Smith,  back  in  the  eighteenth  century,  established 
the  cost  of  living  as  the  controlling  factor  in  the  law  of  supply 
and  demand  in  labor.  There  are  modifying  factors,  such  as 
working  conditions  and  sales  prices,  but  in  the  main,  in  actual 
shop  practice,  little  improvement  on  Adam  Smith  has  yet  been 
made.    , 

When  the  mechanistic  theory  of  labor  came  in  with  Taylor, 
Kmerson,  and  the  "efficiency  school,"  the  employers  of  labor 
who  became  adherents  of  the  school  of  management  proceeded 
confidently  upon  the  scientific  concept  that  labor  is  a  commodity. 

So  far  as  labor  is  a  factor  to  be  applied  to  production  like 
power,  and  materials,  and  overhead,  they  were  consistent.  The 
real  error  lay  in  not  distinguishing  between  labor  as  a  com- 
plex of  applied  force  to  be  released  by  a  human  self-determining 
being,  and  value  released  by  an  inert  and  non-sentient  mecha- 
nism. Even  so,  labor  owes  much  to  this  scientific  management 
movement.  It  replaced  the  old  concept  of  labor  as  a  chattel, 
with  wages  a  grudging  concession,  by  the  idea  of  labor  as  a 
commodity  to  be  purchased  at  market  rates.  Production  re- 
placed time,  and  wages — of  necessity  under  their  system — be- 
came an  incentive  rather  than  a  concession. 

This,  while  improving  the  status  of  the  worker,  still  fell  as 
far  short  as  ever  of  the  real  meaning  of  wages.  For  all  their 
bold  pretension  to  science,  nothing  could  be  more  crudely  unsci- 
entific than  scientific  management's  interpretation  of  the  mean- 
ing of  wages.    The  direct  ratio  between  the  worker's  actual  con- 


io8  SELECTED   ARTICLES 

tribution  to  the  value  of  the  product  and  his  \vage  they  failed  to 
recognize. 

To  point  out  that  time  and  motion  study  assumed  such  a 
ratio  does  not  answer  this  criticism  because  it  is  not  in  any 
analysis  of  work  into  its  elements  that  such  a  ratio  is  estab- 
lished, but  in  the  true  evaluation  of  the  work  performed.  In 
competitive  products,  where  profits  are  slight,  some  such  ratio 
may  occur  but  hardly  bj'  any  consciously  deliberate   purpose. 

The  efficiency  engineer,  persisting  in  his  misconception  of 
wages,  tried  by  the  introduction  of  welfare  work  to  build  up 
the  necessary  good-A\ill  wliicli  the  mere  stimuli  of  bonuses  and 
premiums  could  not  evoke.  Against  this  there  rose  inevitably 
the  same  unreasoning  but  proper  resentment  workers  feel 
against  profit  sharing.  Something  that  was  their  own  was  being 
withheld  to  be  presented  to  them  in  the  guise  of  special  re- 
ward or  benevolence.  Wage-earners  felt  deceived  and  injured 
even  when  they  knew  their  employers  were  well  intentioned. 

What  the  wage  earner  of  today  wants  is  that  which  is  his 
own.  If  he  seems  to  be  asking  for  a  great  deal  more  it  is  in 
part  because  he  is  human,  and  in  part  because  he  is  ill  informed; 
not  necessarily  ill  informed  by  agitators  and  extremists,  but 
ill  informed  in  the  past  bj'  employers  and  capitalists.  So  assid- 
uously have  these  "Captains  of  Industry"  paraded  their  parlor 
magic  of  finance  and  administration  that  the  groundlings,  too 
well  befooled,  now  clamor  for  the  materialization  into  their  own 
hands  and  pockets  of  the  mysteriousl}^  conjured  coin  and  ral)- 
bits!  These  impressive  gentlemen  may  have  to  do  more  than 
merely  brandish  their  empty  silk  hats  and  turn  back  their  cuffs 
— they  may  have  to  submit,  with  such  good  grace  as  they  can 
muster,  to  a  rather  horny  handed  and  thorough  searching. 

It  will  be  no  easy  matter  for  management  to  live  down  the 
indiscretions  of  its  capitalistic  associations.  Alanagement,  to 
our  thinking,  must  be  divorced  from  capital.  Al'anagement  must 
stand  on  its  own  merits — a  type  of  labor. 

The  great  problem  of  the  future  must  be  the  adequate  mea- 
surement of  the  contribution  of  the  three  factors — labor,  man- 
agement and  capital — to  the  product  so  that  each  may  receive 
its  commensurate  share. 

Capital  will  continue  to  scrutinize  management  before  it  in- 
vests; labor  should  do  the  same  before  it  invests.  For  until 
labor  shall  be  regarded  as  an  investment  and  not  as  an  expendi- 
ture, no  real  progress  beyond  an  armed  truce  can  exist. 

And  if  labor  shall  be  regarded  as  an  investment,  wages  must 


PROBLEMS    OF    LABOR  109 

take  some  account  of  depreciation.  The  worker  who  invests 
himself  in  industry  at  a  wage  which  aims  to  meet  only  current 
living  costs,  must  expect  to  find  himself  in  old  age  a  dependent 
on  private  or  public  charity.  This  is  an  arrangement  neither 
humane  or  intelligent.  Industry  owes  a  worker,  in  return  for 
his  productive  years,  a  fair  and  dignified  assurance  of  his  being 
taken  care  of  through  his  non-productive  years.  In  short  his 
depreciation  needs  to  be  written  ofi^,  whether  in  the  form  of  a 
pension  by  the  specific  industry  he  has  served,  or  by  the  opera- 
tion of  compulsory  savings  out  of  an  adequate  wage,  or  by  the 
application  of  state  insurance  assessed  on  all  industry,  it  is 
not  necessary  at  this  time  to  say.  The  essential  principle  to 
keep  in  mind  is  that  wages  that  pretend  to  be  a  complete  return 
for  labor  given  without  making  provision  for  depreciation,  dis- 
ability or  superannuation,  are  economically  unsound  and  can 
never  satisfy  labor's  unrest. 

The  time  may  never  come  when  the  refinements  of  account- 
ing can  eftect,  for  the  purpose  of  adequate  wages,  accurate 
measurement.  In  the  meantime  approximation  must  do,  but 
approximation  by  an  agency  all  parties  can  and  will  trust. 


PAYMENT   BY   RESULTS' 

The  dispute  which  led  recently  to  a  national  lock-out  in  the 
furniture  industry  has  presented  one  interesting  feature  which 
might  with  advantage  be  copied  in  all  Labour  disputes  of  im- 
portance. Throughout  the  dispute  each  party  has  courted  pub- 
licity and  has  repeatedly  issued  to  the  Press  statements  giving 
its  version  of  the  circumstances  and  of  the  questions  at  issue. 
By  this  means  the  public  has  been  placed  in  a  far  better  posi- 
tion than  usual  for  passing  judgment  and  forming  an  inde- 
pendent estimate  on  the  issues  involved.  It  has  at  least  found 
out  what  is  the  real  point  at  stake,  and  that  is  often  by  no 
means  easy  to  discover  even  in  the  most  serious  and  protracted 
disputes. 

But  while  the  furniture  manufacturers  have  set  an  excellent 
precedent  by  courting  publicity  in  this  manner,  it  is  impossible 
to  congratulate  them  upon  the  matter  of  their  more  recent 
pronouncements.  As  the  dispute  has  dragged  on  it  has  become 
manifest  that,  although  there  are  other  issues  involved,  the  one 
point  which  has  efifectually  stood  in  the  way  of  a  settlement  is 

^  The  New   Statesman.     September  20,    1919.   p.   609-10. 


no  SELECTED   ARTICLES 

the  question  of  payment  by  results.  The  employers  desire  to 
impose  upon  the  operatives  a  system  of  payment  by  results 
to  which  the  Trade  Unions  representing  the  woodworkers  have 
always  been  and  still  remain  resolutely  opposed.  Such  a  situ- 
ation has,  of  course,  often  arisen  before  in  many  diiTerent  in- 
dustries. There  is  nothing  new  in  a  dispute  of  which  the  cen- 
tral issue  is  the  method  of  payment  to  be  adopted  in  a  particular 
trade,  or  in  an  attempt  by  employers  to  impose  one  system  while 
the  Trade  Unions  concerned  insist  upon  another.  What  is 
peculiar  in  the  present  case  is  the  bland  and  self-confident 
manner  in  which  the  furniture  trade  employers  in  their  mani- 
festoes inform  the  public  that  payment  by  results  is  clearly  in 
the  best  interests  of  the  operatives  themselves  and  affect  to 
treat  the  Trade  Union  opposition  to  it  as  a  piece  of  quite  unex- 
pected and  wanton  wronghcadedness  on  the  part  of  the  workers. 

The  question  of  payment  by  results  is  one  of  the  most  hotly- 
disputed  issues  between  employers  and  workers  in  at  least  half 
of  the  main  industries  of  the  country.  Practically  the  whole  of 
the  building  and  woodworking  trades  have  always  put  up  a 
strong  and  united  opposition  to  payment  by  results  in  all  its 
forms,  and  for  the  most  part  the  system  has  only  operated 
in  these  trades  in  places  where  the  Trade  Unions  have  been 
too  weak  to  prevent  its  introduction.  The  engineering  and  kin- 
dred trades  have  been  repeatedly  troubled  by  the  time-work 
versus  piece-work  controversy  at  least  for  the  past  half-century, 
and  even  in  the  coal  industry^,  where  piece-work  has  long 
been  firmly  established,  the  miners  have  in  recent  years  been 
sriously  considering  whether  to  insist  on  the  general  adoption 
of  a  time-work  basis  of  payment.  The  opposition  to  payment 
by  results  in  many  trades  comes  not  from  a  wanton  blindness 
on  the  part  of  the  workers  but  from  a  serious  conviction,  whicli 
may  be  right  or  wrong,  that  payment  by  results  is  a  bad  sys- 
tem for  the  trades  concerned. 

This  does  not  mean  either  tliat  all  Trade  Unions  in  all  in- 
dustries are  opposed  to  payment  by  results  or  that  all  employers 
in  all  industries  are  in  favor  of  it.  Some  Trade  Unions,  such 
as  those  in  the  cotton  trades,  have  insisted  upon  piece-work, 
and  have  based  their  whole  policy  of  collective  bargaining  upon 
its  acceptance.  On  the  other  hand,  some  of  the  worst  sweating 
in  the  less  organised  trades  has  been  done  under  a  time-work 
system  by  employers  who  have  resolutely  refused  to  allow  piece- 
work to  be  introduced,  and  have  preferred  to  rely  upon  over- 
drive   by    foremen    without  paying    the    higher    wages   which 


PROBLEMS   OF   LABOR  in 

piece-work  might,  in  these  cases,  involve.  The  position  differs 
from  trade  to  trade.  There  is,  indeed,  a  strong  body  of  La- 
bour opinion  which  is  always  inclined  to  favour  time-work  be- 
cause it  holds  that  payment  by  results  tends  to  break  down 
solidarity  and  set  man  against  man,  and  a  strong  body  of 
Capitalist  opinion  which  is  always  inclined  to  favour  payment 
bj'  results  because  it  believes  that  it  lowers  cost  of  production. 
But,  in  almost  every  case,  the  Trade  Unions  form  their  final 
judgment  upon  the  practical  issue,  and  accept  or  reject  pay- 
ment by  results  according  as  they  believe  that,  in  the  particular 
circumstances  of  their  own  trade,  its  adoption  will  be  beneficial 
or  the  reverse. 

It  is  a  well-known  fact  that  systems  of  pa3^ment  by  results 
always  operate  best  and  with  least  friction  in  those  cases  in 
which  the  output  is  easily  measurable  and  least  liable  to  dis- 
turbance by  external  or  variable  conditions — in  other  words, 
where  a  given  expenditure  of  skill  and  effort  can  be  relied  upon 
to  produce  a  given  quantity  of  production,  and  where  the  ques- 
tion of  quality  is  not  important  because  it  is  largely  out  of  the 
worker's  control,  being  determined  mainly  by  the  machine,  or 
In'  some  other  external  factor.  In  proportion  as  the  conditions 
in  any  particular  trade  deviate  from  this  standard,  it  becomes 
more  difficult  to  agree  upon  the  terms  of  any  system  of  pay- 
ment by  results,  or  to  devise  a  system  which  will  work  with 
even  approximate  justice.  The  contention  of  the  workers  in 
the  woodworking  industry  is  that  the  conditions  of  their  various 
crafts  are  such  as  to  make  a  fair  system  of  payment  by  results 
impossible. 

(b)  Profit  Sharing 
PROFIT   SHARING' 

Jnduslrial  Democracy  in  the  United  States  Will 

Come  by  Practical  Application  of  Profit 

Sharing — A^ot  Philanthropy 

Share — Not  Give 

The  profit  sharing  I  believe  in  is  the  kind  that  is  real ;  the 
kind  that  promotes  thorough  and  efficient  co-operation  between 
employer   and   employe ;   the  kind   that   makes  partners   of   em- 

^  By  George  W.  Perkins,  Chairman  Profit  Sharing  Committee,  Na- 
tional Civic  Federation.  From  Current  Affairs  (Boston).  10:3-5,  23-24. 
September    22,    19x9. 


112  SELECTED   ARTICLES 

ployes;  the  sort  of  profit  sharing  that  is  practiced  between 
partners  in  a  business.  Anything  short  of  this  is  bound  to  re- 
sult in  failure  and  will  widen  the  breach  between  employer  and 
employes. 

Close  observation,  coupled  with  considerable  experience,  has 
convinced  me  that  practically  all  the  many  failures  in  profit 
sharing,  both  in  this  country  and  in  Europe,  have  occurred  be- 
cause at  bottom  the  plans  were  not  honestly  devised  nor 
equitably  worked  out.  In  nine  cases  out  of  ten,  at  some  point 
in  the  practical  application  of  the  plans  that  have  failed,  the  fact 
has  developed  that  they  were  not  mutually  beneficial ;  they  either 
did  not  enhance  the  efficiency  of  the  men  in  such  a  way  as  to 
satisfy  the  employer,  or  else  did  not  distribute  profits  in  such 
a  way  as  to  benefit  and  satisfy  the  employes. 

Relationship  Changed 

The  relation  between  emplo}er  and  employe  has  clianged 
with  the  centuries.  Originally  it  was  owner  and  slave;  then  it 
was  master  and  man ;  now  it  is  employer  and  employe,  each 
stage  of  development  bringing  tlic  employer  and  employe  into 
closer  co-operation.  What  has  caused  this  change  in  relation- 
ship? In  my  judgment  the  cause  is  found  in  the  vast  and  broad 
educational  forces  that  have  been  at  work  in  the  world.  Since 
we  founded  this  country  we  have  spent  approximately  as  much 
money  on  our  education  systems  as  on  our  railroad  systems. 
We  consider  our  railroads  financially  successful  if  they  earn 
dividends. 

Our  Educational  Sy'slon 

If  our  educational  systems  are  succcesful  the  dividends  we 
get  from  them  are  minds  that  think  better,  more  clearly,  more 
independently.  Right  now.  tliis  country  is  getting  such  divi- 
dends from  its  vast  investmint'^  in  among  many  partners.  Xo 
man  or  firm  or  corporation  tliat  is  thinking  of  adopting  profit 
sharing  can  hope  for  educational  plants.  In  the  industrial  world, 
in  the  relations  between  capital  and  labor,  between  employer, 
and  employe,  we  are  getting  these  very  dividends,  and  getting 
them  direct  and  in  cumulative  fashion  on  tlie  wage  question. 

In  the  past,  the  man  who  was  not  educated  or  trained  to 
lliink  independently  struck  because  he  wanted  $2  a  day  if  he 
was  only  getting  $1.75;  and  for  quite  a  period  labor  differences 
were  settled  on  this  basis.     I  liclieve  that  we  arc  rapidly  passing 


PROBLEMS    OF   LABOR  113 

out  of  that  period,  for  our  laboring  people  are  so  well  edu- 
cated and  so  able  to  think  independently  that,  in  many  cases, 
they  are  no  longer  striking  for  a  definite  increase  in  wages,  but 
for  what  they  regard  as  a  fairer  proportion  of  the  profits  of 
the  business  in  which  they  are  engaged.  If  I  am  right  about 
this,  then  we  are  rapidly  leaving  behind  the  period  when  labor 
disputes  could  be  settled  by  a  mere  increase  in  wages  and  are 
entering  the  period  when  profit  sharing  in  some  form  must  be 
practiced.  Therefore,  the  question  is,  how  can  it  be  practiced 
effectively? 

Outline   of  Plan 

A  good  many  years  of  actual  experience  have  made  me  very 
optimistic  regarding  profit-sharing  plans  worked  out  along  the 
following  lines : 

First:  every  business  has,  first  of  all,  to  earn  operating  ex- 
penses,  depreciation,   and   fair   returns  on   honest  capitalization. 

Second:  I  believe  that  every  business  should  consider  that 
the  compensation  paid  employes  is  for  the  purpose  to  pay  the 
above-mentioned  items. 

Third:  I  believe  that  any  profits  over  and  above  such  sum 
should,  on  some  percentage  basis,  be  divided  between  the  cap- 
ital used  in  the  business  and  the  employes  engaged  in  the  busi- 
ness. 

Fourth :  I  believe  that  in  neither  case  should  these  profits 
be  immediately  withdrawn  from  the  business;  that  they  should 
be  left  in  the  business  for  a  reasonable  length  of  time,  to  protect 
and  increase  its  financial  strength  and  safety;  that,  in  the  case 
of  capital,  its  share  of  these  profits  should.be  carried  to  surplus, 
that,  in  the  case  of  employes,  their  share  of  these  profits  should 
be  distributed  to  them  in  some  form  of  security  representing  an 
interest  in  the  business,  and  that  each  employe  should  be  re- 
quired to  hold  such  security  for  a  reasonable  length  of  time, 
say  three  to  five  years. 

Fifth:  I  believe  that  the  employes'  share  of  tlicse  profits 
should  be  allotted  to  them  as  nearly  as  possible  on  the  basis  of 
the  compensation  they  receive.  Up  to  date,  this  has  proved  to 
be  the  best  method. 

Now,  let  us  see  what  such  a  plan  means:  In  the  first  place,  it 
means  that  under  such  an  arrangement  each  employe  becomes  a 
working  partner  in  the  business.  He  is  on  the  same  footing  as 
the  financial  partners,  for  if  the  concern  is  a  partnership  with, 


114  SELECTED   ARTICLES 

say,  four  or  five  members,  the  partners  themselves  are  drawing 
out  each  year  what,  in  a  way,  might  be  called  salaries,  viz., 
approximately  the  amount  of  money  necessary  to  meet  their 
general  living  expenses,  leaving  their  surplus  profits  in  the  busi- 
ness. Any  partnership  or  any  profit-sharing  plan  that  divided 
up  the  profits  and  withdrew  them  in  cash  at  the  end  of  every 
year  could  not  last  very  long. 

Why  Some  Plans  Fail 

Many  profit-sharing  plans  have  divided  profits  with  employes 
on  a  cash  basis  and  turned  the  money  over  to  the  employes 
every  so  often,  usually  once  a  3^ear.  The  result  has  been  that 
if  a  man  earning  $i,ooo  a  year  received  $200  at  the  end  of  the 
year  from  a  profit-sharing  plan,  he  promptly  lifted  his  living 
expenses  from  a  $1,000  basis  to  a  $1,200  basis,  and  began  to  look 
upon  his  income  as  $1,200  rather  than  $1,000,  and  the  extra 
$200  did  little  to  increase  his  activity  and  efficiency,  or  to  pro- 
mote his  intellectual  efforts  in  the  business  concerned. 

Then,  if  a  period  came  when  business  was  dull  or  poor  and 
he  did  not  get  the  extra  $200,  he  found  fault  with  the  owners  of 
the  business  and  became  grouchy  and  inclined  to  lose  interest  in 
his  work.  If  he  did  not  use  the  $200  for  his  hving  expenses,  he 
probably  invested  it  in  a  suburban  lot  or  in  some  stock  that 
was  recommended  to  him,  or  in  something  that  he  knew  little 
or  nothing  about.  Then,  if  his  investment  began  to  go  wrong, 
he  worried  about  it,  and  part  of  the  time  which  he  was  being 
paid  to  devote  to  the  business  in  which  he  was  engaged  would  be 
expended  in  worrying  about  his  investment  in  the  business  in 
which  he  was  not  engaged;  whereas,  if  his  money  were  invested 
in  the  business  in  which  he  was  engaged,  his  desire  to  see  his 
investment  succeed  and  bring  him  further  profits  would  be  con- 
verted into  efforts  that  would  be  of  some  practical  benefit,  not 
only  to  himself,  but  to  the  stockholders  and  his  co-workers. 

In  short,  little  real  substantial  benefit  comes  from  a  profit- 
sharing  plan  where  the  profits  are  paid  out  in  cash,  except  per- 
haps where  a  man  uses  the  money  toward  buying  a  home.  There 
is,  therefore,  a  serious  weakness  somewhere  in  such  a  plan, 
and  the  weakness  lies  in  the  fact  that  profit  sharing  cannot  be 
really  beneficial,  either  for  employer  or  employe,  unless  con- 
ducted on  a  partnership  basis  and  coupled  with  profit  saving. 

Looking  at  it  from  the  viewpoint  of  capital,  the  object  to  be 
accomplished  through   the   adoption   of  profit   sharing  is   added 


PROBLEMS    OF   LABOR  115 

interest  in  the  business  on  the  part  of  the  employes,  which  in 
turn  brings  higher  efficiency.  Looking  at  it  from  the  standpoint 
of  the  employe,  the  object  to  be  accomplished  is  a  fairer  re- 
muneration for  services  rendered.  Therefore,  any  profit-sharing 
plan  that  fails  to  accomplish  both  of  these  results  breaks  down 
sooner  or  later. 

Full  Publicity  Needed 

In  establishing  profit  sharing  it  is  of  the  utmost  importance 
that  the  entire  organization,  the  wage  and  salary  earners,  know 
in  advance  exactly  what  they  are  expected  to  accomplish.  I 
mean  by  this  that,  on  entering  a  new  year,  they  should  know 
exactly  what  the  preceding  year's  accomplishments  have  been. 
The  annual  statement  of  the  firm  should  be  full  and  explicit, 
so  that  every  man  engaged  in  the  enterprise  will  know  what 
business  was  done  in  the  preceding  year  and  on  what  basis 
profits  were  and  are  to  be  distributed.  An  honest,  detailed  an- 
nual statement  tells  him  officially  what  the  profits  were,  if  any, 
and  this  fixes  a  minimum  goal  for  the  coming  year,  which  every- 
one, individually  and  collectively,  will  bend  every  energy  to 
reach  and  exceed  by  as  large  an  amount  as  possible. 

Under  such  an  arrangement  as  this,  each  man,  in  place  of 
working  solely  for  himself  in  his  own  department,  will  pass  on 
to  other  departments  any  ideas  that  occur  to  him  that  might 
help  that  other  department,  and  in  that  way  benefit  the  organi- 
zation as  a  whole.  In  my  judgment,  some  profit  sharing  plans 
are  radically  wrong  in  this  respect.  They  distribute  profits  by 
departments  or  in  some  way  other  than  on  the  basis  of  the  com- 
pany's success  as  a  whole.  This  narrows  the  vision  of  the 
individual,  and  he  lacks  the  proper  incentive  to  help  wherever 
he  can,  whether  in  his  own  or  another  department. 

The  right  kind  of  profit  sharing  offers  definite  goals  that 
an  organization,  individually  and  as  a  whole,  can  buckle  down 
to  and  work  for,  and  it  is  astonishing  how  such  a  plan  of  profit 
sharing  will  heighten  the  esprit  de  corps.  It  removes  petty 
jealousies;  it  makes  a  man  eager  to  pass  his  ideas  on  to  the 
man  in  the  next  department,  and  causes  them  to  vie  with  one 
another  to  reach  and  exceed  the  figures  reached  in  the  preced- 
ing year. 

A  detailed  annual  report  by  the  company  is  not  only  neces- 
sary to  show  the  organization  in  prosperous  years  how  the 
profits  were  arrived  at  and  what  they  amounted  to,  but  equally 


ii6  SELECTED   ARTICLES 

necessary  in  lean  years  to  show  how  the  losses  were  arrived  at, 
what  they  amounted  to  and  why  there  are  no  profits  to  distribute. 
Gradually,  as  the  employes  in  the  organization  become  pari 
owners  in  the  business,  you  broaden  and  deepen  their  interest 
in  their  work.  They  begin  to  think  and  speak  of  the  business 
as  their  business ;  they  work  for  it  as  their  business,  not  your 
business  or  somebody  else's,  and  in  place  of  "knocking"  it  they 
praise  it  and  "boost"  it  in  every  way  they  can,  for  they  have 
become  part  owners  through  being  security  holders  and  are  re- 
ceiving their  interest  or  dividends  at  the  same  time  and  in  the 
same  manner  as  other  security  holders  receive  theirs.  In  other 
words,  once  the  employes  become  security  holders,  they  share 
in  interest  or  dividend  distributions  and  other  profits,  not  only 
as  security  holders,  but  as  employes. 

Objections  Answered 

Many  people  have  said  to  me :  "Oh,  but  it  takes  a  long  while 
for  a  man  who  is  only  saving  a  small  sum  each  year  to  acquire 
much  of  a  financial  interest  in  the  concern  by  which  he  is  em- 
ployed." I  have  always  found  that  such  criticism  comes  from 
some  one  who  has  not  given  sufficient  thought  to  the  subject, 
for  a  small  interest  means  as  much  to  the  man  having  a  com- 
paratively small  salary  as  a  large  interest  does  to  the  man  of 
large  affairs. 

Let  us  summarize  some  of  the  advantages  of  this  method  of 
profit  sharing: 

First :  It  is  real,  it  is  genuine.  The  organization  as  a  whole, 
and  each  individual  in  it,  has  a  definite  goal  for  the  year's  work. 
They  know  at  the  beginning  of  a  year  how  much  money  must 
be  earned  to  cover  what  we  will  call  fixed  charges ;  they  know 
that  they  are  being  paid  salaries  to  earn  those  fixed  charges ; 
they  know  that  they  share  in  all  profits  over  and  above  those 
fixed  charges,  and  they  know  the  basis  on  which  they  share,  and 
that  the  amount  of  such  profits  largely  depends  on  the  indi- 
vidual and  collective  effort  of  each  individual  in  the  organiza- 
tion. This  in  itself  is  of  great  practical  value  to  the  business 
from  a  dollar-and-cent  standpoint.  There  is  no  philanthropy 
about  it.  The  employes  have  a  certain  definite  goal  to  reach. 
If  they  reach  it  they  are  paid  a  definite  percentage  for  doing  so. 
It  is  a  definite  business  proposition,  based  on  the  principle  of 
profit  sharing  as  practiced  in  partnerships. 

Second :   Having  reached  the  goal   set,  the  money  over  and 


PROBLEMS    OF   LABOR  117 

above  the  salaries  they  are  paid — in  other  words,  their  profits — 
are  invested  in  the  business  in  which  they  are  engaged  and  on 
which  their  whole  time  and  thought  and  energy  should  be  cen- 
tered. What  a  great  advantage  this  is  to  the  employer,  and 
what  a  spur  and  an  incentive  to  the  employe !  What  more 
valuable  insurance  policy  could  an  employer  have  against  a 
year  of  poor  earnings?  What  a  real,  genuine  interest  it  arouses 
in  the  worker  for  the  business  in  which  he  is  engaged !  The 
whole  atmosphere,  the  whole  relationship  is  changed.  The  em- 
ployer need  give  little  thought  to  whether  or  not  his  men  are 
"soldiering"  on  him,  whether  or  not  they  are  reall}'  giving  to 
their  work  the  best  that  is  in  them ;  and  the  employe  need  spend 
little  time  wondering  whether  or  not  he  is  being  properly  com- 
pensated. The  whole  relationship  is  placed  on  a  new  basis,  not 
antagonistic,  as  heretofore,  but  co-operative. 

This  plan  is  vastly  different  from  the  one  now  practiced  by 
which  one  set  of  men  w'orking  in  a  business,  viz.,  the  capitalists 
and  partners,  leave  most  of  their  profits  in  the  business,  while 
another  set  of  men,  working  shoulder  to  shoulder  with  them, 
viz.,  the  employes,  each  year  take  their  profits  out  of  the  busi- 
ness and  put  them  somewhere  else. 

Harmful  Profit  Sharing 

It  is  also  vastly  different  from  the  many  bonus  schemes  in 
vogue.  It  differs  greatly  from  the  plan  of  arbitrarily  setting 
aside,  in  a  prosperous  year,  a  certain  lump  sum  of  money  and 
dividing  it  on  a  percentage  basis  among  the  employes.  Under 
such  an  arrangement  no  man  who  gets  any  of  the  money  has 
a  very  definite  idea  of  what  he  did  to  earn  it,  what  it  represents, 
or  what  he  individually  can  do  to  ensure  the  receipt  of  some 
such  sum  during  the  following  year. 

In  fact,  I  am  convinced  that  such  bonus  giving,  erroneously 
called  profit  sharing,  has  done  more  harm  than  good  for  in 
many  instances  it  has  caused  employes  to  think  that  said  bonuses 
were  given  them  because  the  business  was  earning  fabulous 
sums  of  money,  a  tiny  little  bit  of  which  was  throw'n  to  them 
as  a  sop  to  make  them  feel  kindly  disposed  toward  the  owners, 
or  in  order  to  ward  off  a  demnnd  for  a  general  increase  in 
wages.  In  short,  such  bonus  giving  simply  stirs  up  trouble 
rather  than  alleviates  it. 

Profit  sharing,  on  the  basis  I  favor,  is  sometimes  objected 
to  by  men  or  concerns  who  do  not  wish  to  let  even  their  own 


118  SELECTED   ARTICLES 

employes  know  how  little  or  how  much  money  they  are  making 
each  year.  To  such  men  I  always  say  (and  each  year  I  am  more 
and  more  certain  that  I  am  right  in  saying  it)  that  they  are 
very  short-sighted  if  they  do  not  hasten  to  change  their  policy. 
If  they  are  not  making  enough  money  and  the  business  is  run- 
ning on  a  close  margin  each  year,  then  by  all  means  they  should 
set  their  situation  before  their  men,  adopt  such  a  profit-sharing 
plan  as  I  have  outlined,  and  get  the  genuine  co-operation  of 
every  man  towards  increasing  the  profits  and  putting  the  busi- 
ness in  a  prosperous  condition. 

They  are  now  paying  wages  and  salaries,  and  many  a  night 
go  home  wondering  whether  the  employes  are  really  earning 
their  salaries.  Under  such  a  profit-sharing  plan  as  I  have  out- 
lined they  have  a  substantial  guarantee  that  the  salaries  will 
be  earned,  because  in  aiming  to  share  in  profits  over  and  above 
fixed  charges  the  men  are  all  the  more  certain  to  earn  at  least 
the  fixed  charges.  And  would  any  proprietor  or  manager  hesi- 
tate to  pay  a  handsome  premium  each  year  for  an  insurance 
policy  guaranteeing  that  every  employe  in  the  business  would 
have  the  business  on  his  mind  and  work  as  hard  for  its  success 
as  the  proprietor  or  manager  does? 

Benefit  to  All 

One  more  thought  in  this  connection.  The  man  who  is  run- 
ning on  a  small  margin  and  making  little  profit  may  object 
to  making  his  business  affairs  public  property,  on  the  ground 
that  he  would  be  putting  a  weapon  into  the  hands  of  his  com- 
petitors. Such  a  man's  best  protection  against  his  competitors 
is  a  loyal,  closely  knit  organization  of  the  highest  efliciency,  and 
this  important  advantage  he  can  only  secure  through  a  bona  fide 
profit-sharing  plan. 

As  for  the  man  who  is  making  so  much  money  that  he  is 
afraid  to  let  even  his  own  employes  know  how  much  he  is  mak- 
ing, to  that  man  I  say  that  he  is  the  man  who,  more  than  any 
other,  is  responsible  for  the  serious  differences  today  existing 
between  capital  and  labor,  for  with  the  growing  intelligence  of 
the  masses,  how  can  he  expect  such  a  situation  to  continue? 
Every  year,  jes,  every  day,  it  becomes  clearer  and  clearer  that 
such  a  condition  will  no  longer  be  tolerated  and  must  speedily 
pass  away.  Would  it  not  be  better  for  him  to  use  some  intelli- 
gent foresight  and  meet  what  clearly  are  to  be  the  immediate 
future  demands  of  public  opinion? 


PROBLEMS    OF   LABOR  119 

As  for  the  man  who  is  making  large  profits  but  who  objects 
to  profit  sharing  on  the  ground  that  he  wants  to  put  those  profits 
away  against  the  day  when  business  may  be  poor,  to  such  a  man, 
I  say  that  he  had  better  use  some  of  those  profits  to  more 
deeply  interest  his  men  in  his  business,  and  to  do  this  to  such 
an  extent  that  if  the  dark  days  come  he  can  be  pretty  certain 
that  his  men  will  stand  by  the  business  in  a  way  that  capita) 
alone  never  can. 

Obviating  Difficulties 

Profit  sharing  on  the  basis  I  favor  is  also  sometimes  objected 
to  by  concerns  w^hose  securities  are  closely  held.  There  are 
man}-  ways  to  obviate  this  difficulty.  Some  concerns  can  in- 
crease their  capital.  Others  that  cannot,  or  that  cannot  do  so 
for  a  time,  can  obviate  the  difficulty  by  issuing  certificates  of 
participation  that  will  draw  the  same  percentage  of  profit  as 
the  regular  securities  of  the  business.  In  other  words,  where 
there  is  a  genuine  desire  to  share  profits  a  way  can  always  be 
found. 

The  day  of  secretive  methods  is  passing  rapidly.  The  day 
of  publicity  is  at  hand.  The  change  is  a  perfectly  natural  evolu- 
tion due  to  broader  education  and  improved  intercommunication 
and  has  also  come  about  because  it  is  second  nature  to  be  less 
suspicious  and  afraid  of  that  which  is  known  than  of  that 
which  is  unknown.  Any  profit-sharing  plan  without  an  open, 
honest  balance  sheet  and  detailed  annual  report  will  never 
succeed. 

I  am  convinced  that  labor  is  entirely  willing  that  capital 
should  have  its  fair  reward  and  proper  protection,  but  in  this 
country  we  have  had  too  many  instances  where  capital  has  de- 
manded improper  protection  and  taken  exorbitant  reward ;  and 
one  of  the  main  reasons  why  the  serious  problems  confronting 
us  today  are  so  difficult  of  solution  lies  in  the  fact  that  too 
many  men  of  capital  are  still  arrogant  and  unreasonable,  and 
absolutely  unwilling  to  look  with  sufficient  care  and  fairness 
into  the  causes  that  are  producing  the  views  and  opinions  so 
largely  held  by  our  own  people  at  this  time.  On  the  other  hand, 
one  of  the  most  serious  drawbacks  to  increased  output  and  eco- 
nomical production  is  the  listless,  indifferent  service  rendered 
by  a  large  percentage  of  employes.  Making  partners  of  em- 
ployes, through  profit-sharing,  would  correct  this  as  nothing  else 
could. 


120  SKLl'XTKD   ARTICLES 

Profit  Sharing  a  Success 

Some  companies  with  which  I  am  connected  ha\  (.■  realized 
the  trend  of  the  times  and  have  for  some  time  been  practicing 
profit-sharing  along  the  lines  I  have  indicated.  They  believed 
that  profit-sharing  plans  based  on  such  principles  would  so  knit 
their  vast  organizations  together,  and  would  so  strengthen  and 
develop  the  esprit  de  corps,  as  to  make  it  possible  for  the  com- 
panies to  increase  their  business  and  their  earnings;  and  they 
were  willing  to  share  this  increased  success  with  their  em- 
ployes. So  far  they  liavc  every  reason  to  congratulate  them- 
selves on  the  results. 

In  all  parts  of  their  business,  at  home  and  abroad,  in  tlie 
oliice  force,  in  the  factories,  in  the  sales  department,  every- 
where, the  individual  employe's  interest  in  the  business  is  much 
greater  than  formerly.  The  saving  in  waste  everywhere  is 
noticeable.  The  employes  are  vieing  with  one  another  more 
and  more  to  improve  their  respective  and  other  branches  of  the 
business.  All  this  means  success  for  the  company,  profits  for 
the  stockholders,  extra  compensation  for  the  emploj'es.  It 
mearis  getting  men  on  salaries  and  wages  to  have  a  live,  keen 
interest  in  the  management  of  the  business.  It  means  getting  an 
organization  of  men  to  work  as  real  partners.  It  means  recog- 
nizing the  right  of  the  employe  to  a  fairer  share  of  the  earnings 
of  the  business  in  which  he  is  engaged.  In  short,  it  means  co- 
operation that  is  complete,  in  that  it  benefits  stockholder,  em- 
ployer and  employe. 

While  all  this  can  more  readily  be  accomplished  in  a  large 
business,  it  can  also  be  successfully  accomplished  in  a  small 
business  if  approached  in  the  proper  spirit ;  and  if  applied  gen- 
crallj'  it  would  remove  to  a  considerable  degree  the  dangers  that 
are  menacing  modern  industry,  and  which  are  largely  caused  by 
the  feeling  on  the  part  of  the  masses  that,  through  wages,  they 
are  not  getting  their  proper  proportion  of  the  money  earned  in 
a  given  industry. 

WHY    I    BELIEVE    IN    PROFIT    SHARING' 

Boris  Emmet  in  the  August  Review  of  the  Department  of 
Labor  makes  a  strong  case  against  profit  sharing  as  a  solu- 
tion of  the  labor  problem.    It  seems  now  clear  that  to  look  upon 

1  By  Henry  S.  Dennison,  President  and  Treasurer,  Dennison  Mfg.  Co. 
Factory.     20:424.     March,    1918. 


PROBLEMS    OF   LABOR  121 

profit  sliaring  as  auj*  such  panacea  is  a  serious  mistake,  harinful 
alike  to  anj-  real  study  of  the  labor  or  the  profits  problem.  But 
because  profit  sharing  does  not  solve  the  labor  problem  is  no 
earthly  reason  why  its  possibilities  in  otiicr  directions  should 
not  be  thoroughly  searched  out. 

There  are  very  definite  chances  for  improvement  in  the 
customary  distribution  of  profits.  Any  case  of  unearned  or 
undeserved  income,  or  of  unrewarded  successful  effort,  must 
have  actual  effect  in  lowering  the  worth  and  efficiency  of  the 
social  structure,  the  life  of  which  must  more  and  more  depend 
upon  the  fitting  of  reward  to  desert — of  the  punishment  to  the 
crime. 

Picture  a  corporation  led  and  managed  by  salaried  men,  sales 
managers,  financial  men,  purchasing  agent,  factory  manager — 
who  hold  no  stock  in  the  company,  or  at  best  only  the  one  share 
each  necessary  for  directors.  Say,  now,  that  it  pays  a  goodly 
dividend  rate,  perhaps  twenty  percent,  enough  anyhow  to  repay 
amply  all  original  and  present  risks ;  that  it  pays  the  full  going 
rate  of  wages  and  salaries;  and  is  prompt  and  liberal  with  sup- 
pliers and  customers.  If  through  the  energy  and  insight  of  its 
managers  it  earns  more  than  a  net  twenty  percent,  to  whom 
should  the  excess  go? 

On  the  grounds  simply  of  sound  economic  structure — for 
the  purpose  of  maintaining  and  improving  business  and  indus- 
trial efficiency,  it  would  seem  beyond  question  that  it  ought  to 
go  to  the  managing  group.  Sometimes  part  of  it  does,  in  the 
form  of  increases  in  salaries ;  but  our  question  then  applies  to 
the  part  which  doesn't. 

Most  often  only  a  small  portion  of  such  excess  goes  to  the 
managing  group,  the  major  part  frequently  being  passed  to 
stockholders  without  any  question  of  desert,  and  thus  adding  to 
the  unearned  increment,  which  is  already  quite  full  enough  of 
difficulties  and  of  possibilities  harmful  to  sound  industrial 
progress. 

To  the  recipient  the  baleful  effects  of  this  unearned  income 
may  be  increased  by  the  consequent  rise  in  the  sale  value  of 
his  stock;  to  the  managing  group  the  perfectly  apparent  in- 
congruity has  more  and  more  deadening  effect  as  the  oppor- 
tunities for  independent  undertakings  grow  fewer  in  our  aging 
country. 

The  conservative  individual  bases  his  social  philosophy 
firmly  upon  the  assumption  that  men  will  not  do  the  work  which 
must  be  done  to  keep  the  race  alive,  without  an  assured  reward 


122  SELECTED    ARTICLES 

as  a  stimulus,  or  unless  the  results  of  their  efforts  can  be  as- 
sured to  them.  History  and  present  observation  give  strong 
basis  for  this  assumption,  which  can  be  denied  onlj'  by  shifting 
to  grounds  of  hope  and  faith;  and  an  important,  but  an  often 
overlooked  corollary  to  this  is  that  rewards  unearned  by  effort 
cannot  exist  without  weakening  the  will  to  work  of  the  recipi- 
ent. Profits  given  to  capital  in  excess  of  the  amount  it  could 
have  been  bought  for  injure  the  whole  social  structure  through 
him  who  gives  and  him  who  takes. 

If  any  part  of  earnings  in  excess  of  a  fair  return  for  the 
use  and  risk  of  capital  goes  to  stockholders  merely  because  they 
are  stockholders,  and  if  any  part  of  the  managing  group  goes 
without  a  share  of  such  surplus  earnings,  the  situation  is  a 
dangerous  and  harmful  one,  which  should  challenge  the  atten- 
tion of  any  man  who  believes  in  the  necessity  of  an  appropriate 
reward  to  stimulate  enterprise. 

Most  of  our  corporations  are  subject  to  this  criticism  though 
the  facts  are  usually  concealed  by  some  degree  of  stockholding 
among  the  managers,  and  by  the  absence  of  the  data  upon  which 
the  fair  return  to  capital  can  be  figured.  But  they  should  look 
into  their  own  conditions  with  care  and  frankness ;  and,  as  a 
matter  of  public  policy,  the  formation  of  new  corporations  upon 
the  old  lines  should  be  made  difficult. 

A  discussion  of  the  question  of  control  would  follow  almost 
exactly  the  same  course  as  the  above  discussion  of  the  surplus : 
an  unearned,  an  undeserved  control  is  harmful  to  him  who 
exercises  it  and  to  those  over  whom  it  is  exercised.  A  strong 
case  can  be  made  for  the  claim  that  absentee  control  is  a  more 
damaging  social  influence  than  unearned  income.  Doing  away 
with  the  qualifications  of  residence  and  literacy  which  limit  the 
political  electorate  would  not  meet  with  the  favor  of  those  who 
believe  we  need  rather  more  intelligence  than  less  in  voting. 

Absentee  or  unearned  control  is  also  most  often  partially 
concealed  in  the  modern  corporation.  Only  a  minority  may  be 
held  by  outsiders ;  or  proxies  may  habitually  give  the  control  to 
some  one  of  the  managers;  or  a  directorate  skilled  in  manage- 
ment may  seem  wholly  free  of  stockholders'  interference;  how- 
ever smoothly  things  may  work  along  for  the  time  being,  in  the 
long  run  the  real  control  will  have  its  inevitable  influence, 
conscious  or  unconscious,  upon  all  workers. 

To  these  two  objects — the  distribution  of  surplus  more 
nearly  in  accord  with  desert,  and  the  prevention  of  untrained 


PROBLEMS    OF   LABOR  123 

or  absentee  control — the  studies  of  profit  sharing  can  wisely  be 
directed.  While  no  final  solution  of  the  difficulties  is  possible, 
still  constant  progress  must  be  made;  and  the  assignment  of 
profits  with  no  regard  for  desert,  or  of  voting  rights  without 
regard  for  ability  works  against  the  satisfaction  of  the  worker 
and  the  manufacturing  efficiency  of  the  management. 

Studies  in  the  field  of  industrial  relations  can  well  be  con- 
fined to  bettering  the  conformity  of  wage  to  effort  and  to  worth; 
to  increasing  the  opportunities  of  the  employees  to  express  their 
ideas  as  to  all  conditions  of  their  work;  and  to  the  establish- 
ment of  a  social  relation  worthy  of  the  name  between  manager 
and  worker.  If  profit-sharing  studies  are  confined  to  the  logics 
of  control  and  of  surplus  earnings,  a  great  contribution  toward 
social  advance  may  be  made  before  long. 


ROAD    TOWARD    INDUSTRIAL    PEACE  ^ 

A  Changed  Attitude  Since  1914  on  the  Part  of  Both 

Employers  and  Employes  Opens  the  Way  to 

Experivients  in  Profit  Sharing 

There  is  no  doubt  that  the  attitude  of  the  great  majority  of 
employers  toward  the  labor  question  has  undergone  a  great 
change  since  August,  1914.  Many  of  the  conservative,  old- 
fashioned  employers  are  seriously  alarmed  and  much  perplexed, 
and  are  inquiring  as  to  the  means  of  remedying  the  present  con- 
fusions and  disastrous  tendencies.  Thousands  of  employers  are 
trying  to  apply  in  their  own  works  or  factories  new  methods  of 
administration  which  will  make  their  employes  healthier,  more 
comfortable,  and  more  disposed  to  work  with  hearty  good-will 
for  the  success  of  the  particular  industries  in  which  they  are 
engaged,  because  they  themselves  profit  by  that  success.  A  very 
large  number  of  emploj'ers  and  employes  alike  are  beginning  to 
realize  that  nothing  can  cure  the  present  crushing  ills  of  the 
civilized  world  except  abundant  production  by  all  the  peoples ; 
that  high  wages  have  no  tendency  to  cure  the  existing  evils,  but 
on  the  contrary  increase  them,  because  they  raise  the  costs  of 
production  without  increasing  production ;  that  the  scales  of 
wages  on  which  the  health,  happiness,  and  capacity  for  progress 
of  the  human  race  depend  are  badlj^  adjusted  to  each  other,  so 

1  By    Charles    W.    Eliot    from    an    article    in    New    York    Times.      Sep- 
tember 21,    1919. 


124  SELECTED   ARTICLES 

tliat  tlic  results  to  the  community  arc  unjust  and  often  highly 
inexpedient.  Thus,  for  example,  it  is  inexpedient  and  even  ab- 
surd that  a  locomotive  engineer  should  earn  more  than  the  Prin- 
cipal of  a  high  school ;  or  that  a  young  woman  of  22  sewing 
uppers  in  a  well-managed  shoe  factory  should  earn  two  or  three 
times  as  much  as  the  young  woman  who  is  teaching  school  in 
the  sarhe  town ;  or  that  an  indiflfcrcnt  carpenter  or  plumber 
should  be  paid  more  than  a  highly  trained  and  experienced  civil 
engineer,  or  an  ordinary  mason  more  than  a  competent  clerk 
in  a  good  retail  store. 

On  the  side  of  labor  significant  changes  of  mind  arc  also 
visible.  While  the  ignorant  masses  (<f  laborers  are  still  believing 
that  the  only  available  way  to  advance  the  interests  of  their 
class  is  to  fight  for  them  with  any  degree  of  violence  that  may 
be  needed  for  immediate  success,  no  matter  what  sufferings  they 
inflict  on  the  community  at  large,  the  most  intelligent  of  their 
leaders  are  beginning  to  see  that  that  way  leads  to  nothing  ex- 
cept a  common  ruin ;  and  these  leaders  are  also  anxious  lest 
the  masses  abandon  their  own  elected  chiefs.  They  feel  that 
the  rank  and  file  of  the  labor  unions  are  getting  out  of  control, 
and  arc  following  irresponsible  agitators  leather  than  their  re- 
sponsible officers.  They  recognize  that  there  is  no  solution  of 
the  industrial  troubles  to  be  found  by  running  round  the  circle — 
high  wages,  higher  costs ;  high  costs,  higher  wages.  In  short, 
the  best  road  to  industrial  peace  runs  toward  the  increasing  of 
good-will  in  all  productive  work;  because  it  is  plain  that  ill-will 
diminishes  production,  whereas  good-will  is  capable  of  enhanc- 
ing production  to  an  unimaginable  degree.  The  angel's  song 
w-hen  Christ  was  born,  as  given  in  the  revised  version,  is  the 
soundest  economic  and  political  doctrine  which  the  staggering, 
plunging,  bewildered  modern  world  has  as  yet  had  a  chance  to 
listen  to— "Peace  on  earth  to  men  of  good-will." 

Now  is  the  time,  then,  to  discuss  and  experiment  with  profit- 
sharing.  The  arguments  for  and  against  profit-sharing  take  a 
wide  range;  and  so  do  the  experiments  which  are  actually  under 
way.  Many  of  the  experiments  are  so  ill-devised  that  they  in- 
evitably fail ;  and,  on  the  other  hand,  some  of  those  that  suc- 
ceed prove  such  valuable  assets  that  their  devisers  conceal  the 
nature  and  results  of  their  experiments,  lest  their  competitors 
imitate  them.  There  is  obviously  no  such  thing  as  one  best  and 
imiformly  applicable  scheme  of  profit-.sharing.  Every  individual 
factory  should  have  its  own  scheme  adapted  to  its  own  nature, 


PROBLEMS    OF   LABOR  125 

history,  and  surroundings;  and  so  should  every  separate  plant 
of  a  corporation  or  firm  which  maintains  many  scattered  plants. 

Then,  there  are  many  industries  to  which  profit-sharing  can- 
not be  applied  at  all,  just  as  there  are  many  to  which  tlie  eight- 
hour  day  cannot  be  successfully  applied,  unless  it  be  treated  as 
merely  an  acceptable  plan  for  raising  wages.  The  eight-hour 
day  with  its  provisions  about  extra  pay  for  overtime  cannot  be 
used  successfully  in  a  highly  seasonal  industry,  like  canning 
vegetables  and  fruits,  or  in  an  industry  which  inevitably  has 
spasms  of  great  activity  followed  by  periods  of  comparative 
quiet,  like  canning  herring,  or  publishing  a  magazine.  Profit- 
sharing  is,  of  course,  not  applicable  to  any  occupation  which  is 
not  conducted  for  a  profit,  like  the  services  of  charitable,  edu- 
cational, and  religious  corporations,  or  domestic  service,  or  Gov- 
ernment service  of  any  sort,  or  the  service  of  any  corporation 
conducting  a  novel,  experimental,  or  adventurous  business  in 
which  there  is  large  risk  of  either  temporary  or  ultimate  failure. 

Recent  action  by  the  four  railroad  brotherhoods  seems  to 
indicate  that  labor  has  not  yet  apprehended  the  fact  that  no 
Government  undertakings — national,  State,  or  municipal — are 
conducted  for  a  profit,  or  should  be.  The  present  confused  situ- 
ation would  be  clarified  and  improved  by  new  legislation  de- 
claring that  strikes  and  threats  to  strike  are  inadmissible  in  all 
Government  services  and  all  public  utilities;  but  neither  of  the 
present  political  parties  seems  capable  of  carrying  through  such 
legislation.  Possibly  some  new  political  combination  may  arise 
to  frame  and  adopt  it.  The  almost  unanimous  rally  of  public 
opinion  against  the  desertion  of  their  duty  by  the  Boston  police- 
men is  hopeful  in  this  direction.  The  popular  objection  to  such 
desertion  of  duty  applies  with  equal  force  to  firemen,  the  engi- 
neers who  pump  the  water  supply  for  a  large  urban  population, 
and  the  men  who  maintain  the  great  transportation  services  on 
land,  and  with  almost  equal  force  to  the  rnen  who  maintain 
transportation  by  sea. 

Through  the  smoke  and  din  of  the  present  combat  it  already 
appears  to  many  disinterested  lookers-on  that  profit-sharing, 
combined  with  co-operative  management,  in  which  the  employes 
take  active  and  responsible  part,  with  co-operative  care  of  the 
health,  education,  and  happiness  of  employes,  and  with  full 
knowledge  by  the  employes  of  the  employer's  accounts,  is  the 
only  road  to  industrial  peace.  The  great  private  machinery  in- 
dustries,   including  transportation    on    land    and    sea,    constitute 


126  SELECTED   ARTICLES 

the  best  field  for  profit-sharing;  and  it  is  in  this  field  that  per- 
sistent experimentation  is  most  to  be  desired. 

The  objections  to  profit-sharing  are  both  theoretical  and 
practical ;  and  among  the  theoretical  a  leading  one  is  the  not  nn- 
common  apprehension  on  the  part  of  owners,  managers,  and 
their  counsel  that  if  it  be  admitted  in  practice  that  the  working 
people  in  a  mill,  machine  shop,  railroad,  or  mine  arc  entitled  to 
a  share  in  the  profits,  the  profitsharcrs  will  shortly  claim  that 
they  are  entitled  to  all  the  profits.  This  apprehension  cannot 
be  supported  by  observation  of  actual  occurrences  or  by  prac- 
tical experience  of  profit-sharing  schemes;  because  it  is  impos- 
sible to  point  to  any  fair  and  sensible  profit-sharing  scheme 
which  has  produced  that  effect  on  the  minds  of  the  workmen. 
Nevertheless,  it  is  a  formidable  obstacle  to  experimentation  on 
profit-sharing.  Since  it  is  not  based  on  actual  experience  it 
ought  not  to  prevent  stable  corporations  or  partnerships  from 
trying  rational  experiments.  On  the  other  hand,  it  is  difficult 
to  corroborate  by  results  of  actual  experience  the  theoretical 
argument  in  favor  of  profit-sharing  that  it  will  produce  so 
great  an  increase  of  production  as  to  be  highly  profitable  to 
both  capital  and  labor ;  because  the  practical  demonstration  in- 
volves a  publicity  of  accounts  which  is  very  disquieting  to  most 
managers  and  owners,  and  the  revelation  to  competitors  of 
something  which  both  employers  and  employes  quickly  come 
to  regard  as  an  asset  which  it  is  for  their  interest  to  conceal. 

The  advent  to  American  factories  of  many  thousands  of 
ignorant  aliens  who  can  neither  speak  nor  read  English  is,  of 
course,  a  serious  obstacle  to  the  introduction  of  sound  profit- 
sharing  schemes,  since  they  all  require  intelligence  and  some 
knowledge  in  the  participants.  The  only  remedy  for  this 
troublesome  condition  is  education  for  both  children  and  adults 
— a  slow-working  remedy. 

Another  difficulty  which  is  serious,  though  perhaps  tempor- 
ary, is  the  nomadic  habit  of  labor,  which  has  been  brought 
about,  or  at  least  greatly  increased,  by  the  war.  The  rapid 
"overturn"  of  the  labor  which  many  American  employers  have 
experienced  of  late  is  one  of  the  worst  symptoms  of  the  times. 
Profit-sharing  requires  stability  in  the  operative  and  mechanic 
classes,  and  when  accompanied  by  good  housing  and  good  sani- 
tation strongly  promotes  stability. 

Another  obstacle  to  the  introduction  of  profit-sharing  into 
modern  industry  is  the  opinion  which  still  lingers  in  the  manu- 


PROBLEMS   OF   LABOR  127 

facturing,  though  fading  from  the  political  or  Governmental 
field,  that  autocracy  is  more  efficient  than  democracy — a  few 
managers,  indeed,  maintaining  that  autocratic  management  is 
indispensable.  One  of  the  aims  of  the  reformers  of  industrial 
methods  is  often  described  as  the  introduction  of  democracy  into 
business.  The  use  of  this  phrase  incites  to  opposition  a  con- 
siderable number  of  successful  business  men  and  managers  of 
corporations  who  believe  that  active  industries,  like  aggressive 
campaigns  in  war,  must  be  really  conducted  by  single  autocratic 
executives  of  superior  intelligence  and  will-power  and  prophetic 
insight. 

On  this  subject  the  great  war  has  taught  important  lessons. 
It  has  taught  that  in  the  fields  of  commercial  and  industrial  ac- 
tivity which  support  modern  military  and  naval  operations  ex- 
perienced experts  are  the  only  men  who  should  be  given  control. 
These  men  have  been  trained  through  actual  experience  in  the 
various  industries  or  trades  with  which  they  were  connected, 
and  have  therein  proved  their  competency.  The  Washington 
Administration  and  the  State  administrations  apparently  thought 
at  the  beginning  of  the  war  that  the  same  rule  would  apply  in 
the  army  and  navy,  and  accordingly  chose  most  of  their  advisers 
and  commanders  from  the  regular  army  and  navy  of  the  United 
States  and  a  few  from  the  State  National  Guards.  As  these 
sources  shortlj--  proved  to  be  inadequate,  the  National  Adminis- 
tration, so  soon  as  it  attempted  to  raise  a  large  army  by  draft, 
Avas  compelled  to  extemporize  its  officers,  that  is,  to  select  and 
train  them  by  hasty  methods.  The  great  majority  of  these  offi- 
cers came  straight  from  civil  life,  and  were  without  military 
experience.  Great  Britain  was  obliged  to  do  the  same  thing  in 
order  to  get  Kitchener's  mob  promptly  into  the  field.  None  of 
the  armies  opposed  to  Germany  had  had  any  experience  of  the 
kind  of  war  that  Germany  proposed  to  make  and  had  deliber- 
ately prepared  for  during  a  whole  generation.  Germany's  meth- 
ods were  novel  in  important  respects,  and  the  armies  of  the  na- 
tions opposed  to  Germany  all  had  to  learn  how  to  deal  with 
the  new  German  methods  and  implements  of  warfare.  They 
had  to  learn  how  to  make  and  how  to  use  high  explosives,  gas 
shells  and  clouds,  bombing  airplanes  and  submarines.  They  had 
to  learn  how  to  deal  with  the  German  policies  of  wholesale  loot- 
ing, depopulation,  and  devastation  on  land,  and  traceless  sink- 
ing at  sea.  Now,  it  is  an  intensely  interesting  fact  that  Great 
Britain  and  the  United  States  were  very  quick  to  extemporize 


128  SELECTED   ARTICLES 

armies  wliicli  without  long  and  clal)orate  preparation  could  fight 
at  least  as  well  as  ati}'  armies  have  ever  fought,  and  before  long 
better  than  the  German  armies  which  had  had  a  preparation  ex- 
tending over  a  whole  generation  of  men  subject  politically  to 
a  despotism,  and  in  their  military  training  to  an  autocratic  mili- 
tary class.  These  extemporized  armies  were  essentially  citizens' 
armies,  composed  of  citizens  of  democratic  States. 

In  both  these  States  the  industries  in  support  of  the  war 
had  to  be  suddenly  created  or  greatly  enlarged  out  of  the  com- 
mon mass  of  free  citizens;  and  here,  again,  the  freemen  proved 
to  be  superior  as  to  amount  and  quality  of  i>roduct  to  the  Ger- 
mans and  Austrians,  W'ho  had  grown  uj)  tuidcr  an  autocratic 
regime.  The  explanation  oi  tlicsc  military  and  industrial 
phenomena  is  that  men  and  women  accustomed  to  the  theory 
and  practice  of  liberty  possess,  and  will  exhibit  on  occasion, 
more  initiative,  will  power,  and  spontaneous  energy  than  men 
and  women  brought  up  imder  despotisms.  Men  of  intelligence 
and  resolution  can  become  expert  in  war  services  in  a  few 
months,  if  they  are  accustomed  to  act  on  the  motives  which 
inspire  free  men. 

This  war  experience  applies  with  great  force  to  the  conduct 
of  the  great  industries  of  a  free  people  The  industrial  democ- 
racy must  select  and  employ  competent  leaders,  who  can  organ- 
ize and  maintain  a  high  degree  of  co-operative  discipline;  and 
since  leadership  in  long  established  industries  requires  mucli 
more  knowledge  and  skill  than  leadership  in  military  and  naval 
operations  except  in  the  very  highest  posts,  industrial  leaders 
will  require  more  knowledge  and  longer  training  than  military 
leaders  need;  and  the  industrial  democracy  will  have  to  select 
its  leaders  with  great  care,  and  stand  by  them  with  impregnable 
loyalty.  But  these  leaders  should  not  be  autocrats,  and  the  or- 
ganization of  the  great  industries  should  not  bear  the  least  re- 
semblance to  autocratic  or  military  organization,  except  as  both 
require  promptness,  co-ordination,  and  an  understanding  of  the 
common  object.  The  industrial  manager  of  the  future  is  to  be 
a  man  of  knowledge,  skill,  imagination,  good-will,  and  personal 
power.  This  is  the  kind  of  man  that  the  introduction  of  democ- 
racy into  all  bu.siness  may  be  expected  to  produce  and  bring  to 
leadership.  In  support  of  these  views  all  freemen  may  be  asked 
to  take  notice  that  the  proceedings  of  the  British  Parliament 
and  the  Congress  of  the  United  States  and  of  the  administra- 
tions of  those  two  democracies  during  the  war  show  that  po- 


PROBLEMS    OF   LABOR  12Q 

litical  democracies  will  adopt  temporarily  any  amount  of  auto- 
cratic method  which  may  seem  to  them  necessary  to  the  accom- 
plishment of  the  immediate  ends  they  have  in  view.  The  same 
tendency  appeared  in  the  management  of  the  war  industries. 

Prudent  advocates  of  profit-sharing  never  represent  the 
method  as  applicable  in  all  industries,  or  as  th.e  single  cure-all 
for  the  industrial  strife.  They  maintam  that  profit-sharing 
must  always  be  associated  with  co-operative  management,  that 
is,  with  the  effective  sharing  by  the  working  people  in  the  man- 
agement and  discipline  of  the  works  or  shops,  and  also  with 
complete  accessibility  of  the  accoimts  of  the  establishment  for 
the  elected  representatives  of  the  workers,  whether  members  of 
the  company's  Board  of  Directors  or  merely  auditors  satisfac- 
tory to  the  employes.  In  other  words,  profit-sharing  should  be 
only  one  element  in  a  scheme  having  three  parts.  The  object  to 
be  attained  in  any  hopeful  reorganization  of  the  maciiinery  in- 
dustries is  a  generous  sharing  of  control  and  responsibilitj',  and 
therefore  of  profits,  when  there  are  any,  after  w'ages  and  interest 
on  borrowed  money  have  been  paid.  Nothing  short  of  that 
will  give  satisfaction  to  both  parties  in  the  present  industrial 
strife,  and  nothing  else  ought  to.  To  take  together  a  long  step 
on  the  road  toward  lasting  peace  employers  and  employes  must 
be  really  partners,  with  like  motives  for  diligence,  the  preven- 
tion of  wastes,  and  the  adoption  of  improvements. 

Some  business  men,  who  are  familiar  with  the  legal  and  com- 
mercial definition  of  a  partner  as  a  person  who  has  agreed  to 
divide  with  specified  associates  both  the  losses  and  the  profits 
of  their  common  business,  and  is  competent  to  bear  his  share 
of  the  losses,  have  no  use  for  the  suggested  partnership  between 
capital  and  labor,  because  labor  obviously  cannot  bear  any  part 
of  losses.  Labor  certainly  cannot.  Its  wages  have  been  paid  in 
advance  by  capital,  and  have  been  mostly  spent  for  subsistancc 
before  profits  or  losses  have  been  declared  for  the  period 
covered  by  the  wages.  Nevertheless,  sharing  profits  with  capital, 
when  there  are  profits,  is  a  practice  of  high  value  as  incentive  to 
zealous  and  accurate  work  and  to  constant  care  of  raw  materials, 
tools,  machinery,  and  finished  product.  This  incomplete  kind 
of  partnership  has,  therefore,  strong  good  effects. 

In  the  United  States  certain  policies  already  adopted  in  the 
hope  of  improving  industrial  conditions  tend  to  prevent  the 
adoption  on  a  large  scale  of  genuine  profit-sharing  or  copartner- 
ship.    These   are  the   minimum   wage,   the   "basic"   day,   and  the 


I30  SELECTED   ARTICLES 

standard  week  policies,  and  in  general  the  tendency  to  desire 
or  demand  uniform  regulations  for  the  infinite  variety  of  indus- 
tries which  exist  in  a  country  presenting  great  diversities  of 
soil,  climate,  racial  and  traditional  conditions,  and  food  and 
drink  habits.  Variety,  fiexibility,  and  mobility  in  industral  regu- 
lation should  be  the  aim,  not  uniformity  and  stiffness. 

Another  serious  difficulty  in  introducing  real  copartnership 
is  the  failure  of  a  large  portion  of  the  public  to  realize  that  new 
capital  is  incessantly  needed  in  any  business  which  is  to  expand 
or  grow,  or  even  to  maintain  its  efficiency.  Hence,  to  impede  or 
prevent  the  steady  flow  of  new  capital  into  a  factory  industry 
is  to  destroy  it.  Moreover,  a  fair  return  for  capita!  in  a  long- 
established  and  steady  industry  producing  staple  commodities 
is  a  very  different  thing  from  a  fair  return  for  capital  in  a  new 
and  adventurous  industry,  or  in  an  industry  which  produces 
articles  w'hose  market  value  depends  on  fashion,  social  whims, 
extravagant  advertising,  the  ups  and  downs  in  respect  to  pros- 
perity of  different  classes  in  the  community,  or  changes  in  the 
pleasures,  games,  or  sports  of  the  populace.  A  strong  argu- 
ment in  favor  of  opening  an  employer's  accounts  to  his  employes 
is  that  through  know^ledge  of  the  accounts  employes  gradually 
learn  that  new  capital  is  frequently  needed,  and  that  in  most 
businesses  money  has  to  be  borrowed  at  some  peak  of  the  busi- 
ness ;  so  that  the  employer  must  have  credit  at  the  places  where 
money  can  be  borrowed.  A  curious  illustration  of  this  point 
came  to  light  this  Summer  in  a  canning  establishment  in  the 
Middle  West,  which  has  a  strong  peak  lasting  from  three  to 
four  months.  The  business  is  really  managed  by  a  mixed  com- 
mittee containing  manager,  directors,  and  foremen  or  heads  of 
departments,  all  of  whom  are  profit-sharers.  The  company  is 
new,  and  has  no  credit  as  such,  the  borrowing  power  lying  with 
the  manager.  Knowing  that  a  considerable  sum  of  money  would 
have  to  be  borrowed  in  order  to  carry  on  the  business  during  the 
peak,  the  managing  committee  insisted  that  the  life  of  the  man- 
ager should  be  insured  for  an  amount  which  would  cover  the 
habitual  borrowings  for  the  peak.  The  managing  committee 
took  this  action  because  it  wanted  to  be  sure  of  the  money  neces- 
sary to  carry  on  the  business,  in  case  the  manager  should  die 
before  or  during  the  peak.  These  profit-sharers  had  learned  in 
a  few  months  much  about  the  proper  co-operation  between 
capital  and  labor,  although  the  plan  of  profit-sharing  under 
which  they  were  working  was  a  defective  one. 


PROBLEMS    OF   LABOR  131 

On  one  point  there  is  the  utmost  diversity  of  opinion  among 
advocates  of  profit-sharing,  namely,  ^n  the  expediency  of  the 
workers'  acquiring  shares  in  the  capital  stock  of  the  corporation 
which  employs  them.  The  British  Labor  Copartnership  Asso- 
ciation advocates  the  systematic  acquirement  of  share  capital 
by  the  workers  as  the  principal  method  of  profit-sharing.  In- 
deed, the  British  association  argues  against  the  payment  of  any 
cash  dividend  to  paj-roU.  In  the  United  States  several  large 
corporations  have  offered  their  employes  strong  pecuniary  in- 
ducements to  put  their  savings  into  the  stock  of  the  employing 
companies.  There  are  obviously  serious  objections  to  profit- 
sharing  b}'  compulsory  or  urged  purchase  of  shares  in  the  em- 
ploying company's  stock.  In  the  first  place,  the  method  is 
chiefly  applicable  to  the  higher-paid  employes,  like  heads  of  de- 
partments, foremen,  salesman,  and  clerks.  Secondly,  if  the 
employing  company  urges  its  working  people  to  put  their  savings 
into  its  stock,  or  tries  to  induce  them  to  do  so,  it  takes  the  re- 
sponsibility for  the  effects  of  heavy  falls  in  the  market  price 
of  its  stock,  which  are  sure  to  be  resented  by  those  of  its  em- 
ployes who  have  invested  therein.  Thirdly,  the  method  violates 
the  commonest  rule  of  judicious  investors,  namely,  the  rule 
against  putting  all  one's  eggs  into  one  basket.  It  is  not  obvious 
that  the  limited  control  over  the  management  of  a  business 
which  can  be  exercised  by  the  moderate  proportion  of  the  work- 
ing people  in  any  plant  that  can  become  share  holders  to  a  small 
or  even  a  large  extent  in  the  employing  compan}'^  will  be  only 
a  short  step  toward  industrial  peace? 

On  both  sides  of  the  profit-sharing  discussion  it  is  essential 
to  be  cautious  in  arguing  from  the  success  or  failure  of  single 
instances  of  applied  profit-sharing.  The  instance  most  relied  on 
by  advocates  of  a  thorough  co-partnership  between  capital  and 
labor  is  that  of  the  thirty-eight  joint  stock  gas  companies  of 
Great  Britain,  with  combined  capital  of  $270,000,000;  because  it 
has  been  in  operation  for  thirty  years,  and  has  withstood  many 
serious  difficulties,  including  a  great  strike,  the  continuous  oppo- 
sition of  organized  labor,  broad  fluctuations  in  the  prices  of  coal 
and  of  the  by-products  of  the  gas-makin.^  process  and  the  fric- 
tions of  the  great  war.  Yet  the  workers'  share  of  profit  in  these 
great  companies  is  put  into  the  cai>ital  of  the  business  and  not 
paid  in  cash.. 

The  experience  of  London  with  its  gas  companies  is  thus 
stated  by  the  British  Labor  Copartnership  Association: 


132  SELECTED   ARTICLES 

"In  London,  of  the  eleven  gas  companies  six  practice  co- 
partnership; but  these  six  have  forty  times  as  much  capital  and 
produce  thirty-four  times  as  much  gas  as  the  other  five,  and 
all  sell  it  at  a  cheaper  rate." 

Nevertheless,  in  these  companies  both  co-operative  manage- 
ment and  profit-sharing  are  far  from  complete. 

In  the  United  States  there  are  numerous  examples  of  suc- 
cessful co-operative  management  and  profit  sharing  based  on  in- 
ducing the  workers  to  take  up  shares  in  the  stock  of  the  com- 
pany. One  corporation  conducting  a  highly  seasonal  industry 
divides  net  profits  equally  between  shareholders  and  the  profit- 
sharing  payroll,  but  pays  the  dividend  to  payroll  only  in  stock, 
the  company  promising  to  buy  on  demand  from  any  employe  his 
stock  at  par,  and  all  the  profit-sharers  promising  that  they  will 
sell  their  shares  back  to  the  company  at  par  if  they  leave  the 
service.  This  is  certainly  an  ingenious  modification  of  the  ordi- 
nary dividend  to  payroll  in  stock;  but  the  company's  experience 
with  it  is  too  short  and  its  business  too  peculiar  to  permit  any 
safe  inference  as  to  its  applicability  in  general.  In  this  company 
profit-sharing  and  co-operative  management  are  alike  limited  to 
employes  who  are  all-the-year-round  workers ;  and  these  work- 
ers are  paid  weekly  wages  whether  they  are  sick  or  well,  and 
whether  business  is  brisk  or  slack,  and  they  expect  to  work  long 
hours  during  the  peak  of  the  business,  and  receive  no  additional 
pay  for  overtime.  There  are  also  interesting  examples  of  giving 
consumers  a  share  in  the  profits  of  the  concerns  from  which  they 
buy,  and  many  examples  of  co-operative  buying  and  selling  by 
neighborhoods.  But  the  methods  employed  to  secure  profit-shar- 
ing have  often  been  ill-devised,  and  the  results  in  successful 
cases  have,  as  a  rule,  not  been  published. 

Any  kind  of  profit-sharing  will  succeed  which  appeals  to  the 
fundamental  motives  that  have  for  manj'  centuries  past  induced 
men,  rising  out  of  barbarism,  to  be  industrious  and  frugal,  and 
to  keep  their  promises  and  contracts.  These  motives  are  love 
of  home  and  its  surroundings,  and  of  parents  and  brothers  and 
sisters  in  the  first  home  and  of  wife  and  children  in  the  second, 
the  desire  to  have  steady  employment  and  to  accumulate  prop- 
erty for  the  sake  of  home  and  descendants,  and  the  hope  of 
freedom  from  the  dread  of  disabling  sickness  or  accident,  pre- 
mature death,  and  a  forlorn  old  age.  Free  Governments  give 
these  motives  play,  and  a  democratic  administration  of  business 
will  do  the  same,     Gcmiine  partnership  between  labor  and  cap- 


PROBLEMS    OF   LABOR  133 

ital  will  develop  and  satisfy  these  motive  powers  in  both  the 
partners,  because  every  good  profit-sharing  scheme  turns  out  to 
be  for  the  advantage  of  both  parties.  War— especially  the  mod- 
ern German  kind  of  war — suspends  the  action  of  all  these  mo- 
tives, besides  killing  and  disabling  multitudes  of  young  men, 
imparing  the  vitality  of  millions  of  old  men,  women,  and  chil- 
dren, and  wiping  off  the  face  of  the  earth  thousands  of  beloved 
family  homes.  To  prevent  the  recurrence  of  such  destruction 
thousands  of  young  Americans  laid  down  their  lives.  Is  fierce 
industrial  war  to  succeed  within  each  nation  to  the  international 
war  just  closed?  Is  the  impoverishment  of  all  the  nations  to 
continue  and  increase?  Are  hate,  jealousy,  and  anger  to  govern 
the  conduct  of  the  nations,  or  of  different  classes  within  the 
same  nation?  The  good  sense  and  good  feeling  of  the  Amer- 
ican people  at  large  can  prevent  these  fatal  calamities  if  capital 
and  labor  will  establish  friendly  co-operative  relations,  and  ex- 
periment together  on  the  best  way  to  feed,  clothe,  warm,  and 
house  the  world  in  comfort.  The  road  to  industrial  peace  is 
the  road  to  good-will  among  all  classes  and  conditions  of  men, 
and  there  is  no  other  worth  traveling  at  all. 


THE   PROFIT-SHARING   FALLACY^ 

Profit-sharing  is  an  attempt  to  throw  the  workers  off  the 
track  that  leads  to  victory. 

Labor  and  capital,  it  is  claimed  by  those  who  advocate  it, 
should  end  their  conflict  by  entering  into  partnership  and  shar- 
ing profits  on  a  definite  basis  of  division. 

If  the  workers  were  to  accept  this  seemingly  generous  pro- 
posal, they  would  find  their  last  case  worse  than  their  first. 

Speeding  up  would  inevitably  result  in  the  effort  to  augu- 
ment  their  share  by  increasing  profits.  And  there  would  be 
a  tendency  to  connive  at  high  prices,  with  the  same  end  in  view. 

The  total  effect  would  be  most  damaging  to  the  interests  of 
the  working  class.  They  would  produce  more  and  get  less. 
Their  labor  would  become  intensified,  while  their  purchasing 
power  would  decline. 

The  workers  would  do  the  speeding  up,  for  capital  as  such 
is  incapable  of  exertion.  The  workers  would  p»y  the  high 
prices,  for  capital  as  such,  is  not  a  consumer. 

*  From  International  Steam  Engineer.  (Thi»  article  repreienti  the  point 
of    view    of    organized   labor — Ed.) 


134  SELECTKD   ARTICLKS 

Instead  of  improving  their  economic  condition  by  profit- 
sharing,  any  general  adoption  of  the  scheme  ■<voiild  lower  the 
status  of  the  workers  and  confirm  their  servitude. 

There  is  another  aspect  of  the  matter,  and  a  vitally  important 
one.     Profit-sharing  would  destroy  unionism. 

The  interests  of  the  workers  would  be  split  up  and  divided 
among  unrelated  commercial  enterprises,  many  of  them  in  actual 
competition  with  one  another.  No  longer  would  they  be  bound 
together  for  the  redress  of  wrongs  suffered  in  common  and  the 
assertion  of  rights  demanded  in  common. 

They  would  be  rivals  in  business  and  all  their  hopes  would 
center  on  pushing  the  particular  concern  with  which  they  were 
associated,  thus  rendering  vastly  more  difficult  any  united  pur- 
pose. 

Unionism  would  disappear,  and  with  unionism  the  most 
powerful  factor  making  for  the  progress  of  the  race. 

This  is  a  feature  of  profit  sharing  that  will  commend  it  to 
capitalists,  because  the  progress  of  the  race  means  the  elimi- 
nation of  their  class  dominance  and  the  establishment  of  an  in- 
dustrial commonwealth  in  which  they  would  have  no  function 
to  perform. 

But  it  would  be  disastrous  for  the  workers,  riveting  upon 
them  the  chains  of  slaverj'  and  stripping  them  of  their  historic 
mission  of  carrying  on  the  evolution  of  society  and,  by  liberating 
themselves,  setting  free  mankind. 

A  big  Australian  firm  recently  announced  its  intention  of  put- 
ting its  employes  on  a  profit-sharing  footing,  its  managing  direc- 
tor declaring  that  in  this  method  lay  the  solution  of  the  indus- 
trial problem. 

That  many  other  firms  will  follow  suit,  when  the  labor  situ- 
ation will  be  pregnant  with  revolutionary  possibilities,  there  can 
be  little  doubt. 

The  workers  must  be  on  their  guard  against  this  cunning  and 
plausible  confidence  trick.  Nothing  is  for  their  good  that  dis- 
perses their  interests  in  a  thousand  different  directions,  instead 
of  concentrating  them  on  one  desired  goal. 

The  industrial  problem  will  never  be  solved  till  capital 
ceases  to  be  regarded  as  an  active  participant  in  production, 
rightly  demanding  profits,  and  becomes  what  it  really  is,  a  mere 
instrument  in  the  hands  of  labor,  no  more  entitled  to  dividends 
than  a  pick  or  a  shovel. 


PROBLEMS    OF    LABOR  135 

(c)  Minimum  Wage 

THE    ECONOMIC   THEORY    OF   A    LEGAL 
MINIMUM    WAGE' 

The  fixing  of  a  minimum  wage  b}'  law — making  it  a  penal 
offense  to  hire  labor  at  a  lower  rate  than  that  fixed  by  the  law 
— is  now  an  accomplished  fact,  of  which  the  world  has  had  half 
a  generation  of  experience.  In  this  matter  of  the  legal  mini- 
mum wage  the  sixteen  years'  actual  trial  by  V^ictoria  is  full  of 
instruction.  Victoria,  which  is  a  highly  developed  industrial 
state,  of  great  and  growing  prosperity,  had  long  had  factory 
laws,  much  after  the  English  fashion.  In  1896,  largely  out  of 
humanitarian  feeling  for  five  specially  "sweated"  trades,  pro- 
vision was  made  for  the  enforcement  in  those  trades  of  a  legal 
minimum  wage.  Naturally  this  was  opposed  by  all  the  argu- 
ments with  which  we  are  familiar — that  it  was  "against  the  laws 
of  political  economy,"  that  it  would  cause  the  most  hardly 
pressed  businesses  to  shut  down,  that  it  would  restrict  employ- 
ment, that  it  would  drive  away  capital,  that  it  would  be  caiel  to 
the  aged  worker  and  the  poor  widow,  that  it  -ould  not  be  car- 
ried out  in  practice,  and  so  on  and  so  forth.  Naturally,  too,  all 
sorts  of  criticisms  have  since  been  leveled  at  the  administration 
and  working  of  the  law ;  and  over  and  over  again  eager  oppon- 
ents, both  in  England  and  on  the  spot,  have  hastened  to  report 
that  it  had  broken  down.  But  what  has  been  the  result?  In  the 
five  sweated  trades  to  which  the  law  was  first  applied  sixteen 
years  ago,  wages  have  gone  up  from  12  to  35  per  cent,  the  hours 
of  labor  have  invariably  been  reduced,  and  the  actual  number 
of  persons  employed,  far  from  falling,  has  in  all  cases,  rela- 
tively to  the  total  population,  greatly  increased.  Thus  the  legal 
minimum  wage  does  not  necessarily  spell  ruin,  either  for  the 
employers  or  for  the  operatives.  But,  of  course,  it  is  open  to 
any  theorist  to  urge  that  we  do  not  know  how  much  better  off 
these  trades  might  have  been  without  the  act.  The  only  test 
here  is  what  the  people  say  who  are  directly  concerned,  who  see 
with  their  own  eyes  the  law  actually  at  work,  and  who  are 
forced  daily  to  compare  the  trades  to  which  it  applies  with  those 
to  which  it  does  not  apply.  First  let  us  notice  that  the  act  of 
1896   (like  the  British  Trade  Boards  Act  of  1909)   was  only  a 

'  By    Sidney    Webb.      Journal    of    Political    Economy.      December,    19  li. 


iX)  SELECTED   ARTICLES 

tcmporarj-  one.  It  has  during  the  past  sixteen  years  been  in- 
ccssantlj'  discussed ;  it  has  been  over  and  over  again  made  the 
subject  of  special  inquiry;  it  has  been  repeatedly  considered  by 
the  Legislature;  and,  as  a  result,  it  has  been  five  successive 
times  renewed  by  consent  of  both  Houses.  Can  it  be  that  all 
this  is  a  mistake?  Still  more  convincing,  however,  are  the  con- 
tinuous demands  from  the  other  trades,  as  they  witnessed  the 
actual  results  of  the  legal  minimum  wage  where  it  was  in  force, 
to  be  brought  under  the  same  law. 

Pi-ovision  is  made  for  this  extension  by  resolutions  which 
have  to  be  passed  by  both  Houses  of  the  Legislature.  The  first 
trades  to  which  the  law  was  applied  were  those  of  bootmaking 
and  baking  (employing  mainly  men),  clothing,  shirts  and  under- 
clothing (employing  mainly  women),  and  the  very  troublesome 
furniture  trade,  in  which  the  Chinese  had  gained  a  secure  foot- 
ing. It  naturally  took  some  time  to  get  the  law  to  work,  to 
OAcrcome  the  inevitable  difficulties  and  to  demonstrate  any  re- 
sults. Accordingly  for  four  years  there  was  no  extension.  Li 
igoo,  however,  we  had  the  brickmakers  coming  in,  and  the 
butchers,  the  cigar  makers  and  the  confectioners,  the  coopers 
and  the  engravers,  the  fellmongcrs,  the  jewelers,  and  the  jam 
trade,  the  makers  of  millet  brooms  and  the  pastry  cooks,  the 
platcglass  manufacturers  and  the  potters,  the  saddlers  and  the 
tanners,  the  tinsmiths  and  the  woodworkers,  the  woolen  manu- 
facturers and,  perhaps  the  most  significant  of  all,  the  strongly 
organized  printers,  including  the  compositors  in  the  great  news- 
paper offices.  Li  the  following  year  (1901),  so  far  from  there 
being  any  signs  of  repentance,  there  was  an  equal  rush  of  exten- 
sions of  the  law  to  industries  of  all  kinds — the  aerated  water 
makers  and  the  manufacturers  of  artificial  manure,  the  brass 
workers  and  tlie  bedstead  makers,  the  brewers  and  the  brush 
workers,  the  iron  moulders  and  the  makers  of  leather  goods, 
the  maltsters  and  the  oven  makers,  the  stonecutters  and  the 
workers  in  wicker.  For  three  years  tlicre  was  then  a  pause, 
the  legal  minimum  wage  being  only  demanded  hy  and  extended 
to  the  dressmakers  in  1903.  In  1906  came  another  rush  of 
trades,  the  agricultural  implement  makers,  the  cardboard  box 
inakers,  the  candle  makers,  the  cycle  trade,  the  farriers  and  the 
flour  millers,  the  milliners  and  the  paper  bag  makers,  the  manu- 
facturers of  starch,  soap  and  soda,  and  the  makers  of  water- 
proof clothing.  In  the  following  year  (1907)  only  the  glass- 
workers  and  the  picture  frame  makers  came  in.     The  year  1008 


PROBLEMS    OF   LABOR  137 

saw  the  application  of  the  law  to  the  bread  carters,  the  hair- 
dressers, the  manufacturers  of  ice  and  the  wireworkers.  In 
iQog  it  was  extended  to  the  carpenters,  the  carriage  builders,  the 
carters,  the  drapers,  the  electroplaters,  the  grocers,  the  ham  and 
bacon  curers,  the  dealers  in  coal,  wood,  hay  and  chaff,  the  mak- 
ers of  men's  clothing,  the  organ  builders,  the  painters,  the  man- 
ufacturers of  polish,  the  plumbers,  the  quarrymen,  the  makers 
of  rubber  goods,  and  that  mysterious  craft  the  tuckpointers. 
During  1910  there  came  in  the  boiler  makers,  the  boot  makers, 
the  bricklayers,  the  coal  miners,  the  electrical  engineers,  the 
factory  and  mining  engine  drivers,  the  gold  miners,  the  hard- 
ware makers  and  the  hotel  employees,  the  marine-store  dealers, 
the  plasterers,  the  stationers,  the  teapackers,  the  tilers,  the 
watchmakers,  the  slaughterers  for  export,  the  undertakers  and 
even  the  lift  attendants.  \Vhat  occupations  were  left  to  come 
in  during  191 1  and  igi2  I  do  not  yet  know. 

Now,  in  this  remarkable  popular  demonstration  of  the  suc- 
cess of  the  act,  tested  by  the  not  inconsiderable  period  of  six- 
teen years,  extending  over  years  of  relative  trade  depression  as 
well  as  over  years  of  boom,  some  features  deserve  mention. 
First,  the  extension  have  frequently — indeed,  it  may  be  said 
usually — taken  place  at  the  request,  or  with  the  wiUing  acquies- 
cence, of  the  employers  in  a  trade,  as  well  as  of  the  wage  earn- 
ers. What  the  employers  appreciate  is,  as  they  have  themselves 
told  me,  the  very  fact  that  the  minimum  wage  is  fixed  by  law 
and  therefore  really  forced  on  all  employers :  the  security  that 
the  act  accordingl}'  gives  them  against  being  undercut  bj'  the 
dishonest  or  disloyal  competitors,  who  simply  will  not  (in  Vic- 
toria as  in  the  port  of  London)  adhere  to  the  common  rules 
agreed  upon  by  collective  bargaining.  We  must  notice,  too,  that 
the  application  of  the  law  has  been  demanded  by  skilled  trades 
as  well  as  by  unskilled,  by  men  as  well  as  by  women,  by  highly 
paid  craftsmen  and  by  sweated  workers,  by  the  strongly  organ- 
ized trades  as  well  as  by  those  having  no  unions  at  all.  One 
is  tempted,  indeed,  to  believe  that  little  remains  now  outside  its 
scope  except  the  agricultural  occupations  and  domestic  service ! 
Nor  can  it  be  said  to  be  confined  to  industries  enjoying  a  pro- 
tective tariff,  for  there  are  no  import  duties  to  shield  the  gold 
miners,  or  the  quarrymen,  or  the  slaughterers  for  export ;  and 
no  fiscal  protection  helps  for  carters  or  the  butchers,  the  drap- 
ers' assistants  or  the  engine  drivers,  the  newspaper  printers  or 
the  potters,  the  grocers  or  the  hairdressers,  the  hotel  employees 


138  SELECTED   ARTICLES 

i)r  the  lift  altendants.  And  it  is  difficult  to  believe  that  the  en- 
I'mieincnt  of  a  legal  minimum  wage  in  all  these  hundred  differ- 
ent industries,  employing  11,000  persons  (being,  with  their  fami- 
lies, more  than  a  quarter  of  the  entire  population  of  the  state), 
has  interfered  with  the  profitableness  of  industry,  when  the 
number  of  factories  has  increased,  in  the  sixteen  years,  by  no 
less  than  60  per  cent,  and  the  numbers  of  workers  in  them  have 
more  than  doubled.  Certainly,  no  statesman,  no  economist,  no 
political  party  nor  any  responsible  newspaper  of  Victoria,  how- 
ever much  a  critic  of  details,  ever  dreams  now  of  undoing  the 
iniiiimum  wage  law  itself. 


HOURS  OF  WORK 
(a)  The  Shorter  Work-Day 

THE    EIGHT-HOUR    DAY  ^ 

The  question  as  to  the  length  of  the  working  day  is  before 
the  manufacturer  and  the  pubhc  as  never  before,  and  in  such 
strength  that  it  den^ands  a  sohition.  Labor  wants  eight  hours, 
but  unfortunately  many  employers  cannot  see  that  their  best 
interests  will  be  served  by  operating  their  plants  on  an  eight- 
hour  basis.  Some  wise  employers  adopted  the  eight-hour  day 
long  ago  of  their  own  accord ;  others  were  forced  to  the  decision 
by  the  demands  of  labor ;  while  still  others  are  resisting  and 
stoutly  maintaining  a  longer  day. 

Those  who  are  worknig  a  ten-hour  day  seem  able  to  sec 
in  the  eight-hour  plan  only  increased  costs,  both  as  to  labor 
and  burden  charges.  They  seem  to  overlook  the  fact  entirely 
that  the  work  accomplished  and  not  time  spent  in  the  shop  is 
the  factor  which  determines  costs. 

The  case  of  one  manufacturer,  which  is  typical  of  many,  may 
be  cited.  His  plant  was  operating  on  a  ten-hour  basis;  he  was 
shown  conclusively  that  the  employees  were  not  working  over 
eight  hours,  that  they  started  late,  quit  early,  and  were  idle  for 
considerable  periods  during  the  day,  and  he  was  urged  to  put 
the  plant  on  an  eight-hour  basis.  However,  he  replied,  "We 
prefer  to  operate  ten  hours  and  let  the  men  take  it  easy."  Now 
that  is  not  what  the  men  want.  They  want  an  eight-hour  day 
and  are  willing  to  work  energetically  for  eight  hours.  Very 
few  men  are  shirkers  and  most  of  the  so-called  loafing  is  occa- 
sioned by  conditions  in  a  plant,  not  by  laziness  on  the  part  of 
the  employees. 

One  of  the  strongest  unions  in  the  countrj^,  all  of  whose 
members  work  on  an  eight-hour  basis,  has  laid  down  rules  for 
its  members  which  require  them  to  give  eight  hours  of  actual 

^  By  C.  J.  Morrison.  Engineering  Magazine,  p.  363-6.  December, 
1915- 


I40  SELECTED   ARTICLES 

work.  The  rules  stipulate  that  the  men  must  be  in  their  work- 
ing clothes  at  their  assigned  places  for  work  before  time  for 
starting  work,  and  must  not  leave  their  places,  clean  up  or  re- 
move their  working  clothes  until  after  time  for  quitting  work. 
Aloreover,  each  shop  has  a  representative  of  the  union  who  sees 
to  it  that  the  rules  are  obeyed.  Whether  or  not  the  men  work 
during  the  eight  hours  is  up  to  the  management. 

Of  course  if  a  plant  simply  changes  from  ten  hours  to  eight 
and  operates  under  rule  of  thumb  methods,  costs  will  be  in- 
creased. On  the  other  hand  if  the  work  is  properly  planned 
and  despatched  so  that  each  worker  always  has  a  job  and  the 
necessary  tools  for  performing  the  work,  the  costs  can  actually 
be  reduced. 

To  show  that  the  costs  can  be  reduced  when  a  change  is  made 
to  a  shorter  working  day,  the  experience  of  three  large  concerns 
may  be  cited.  These  concerns  operate  in  entirely  different  lines 
and  among  them  employ  a  very  diversified  line  of  labor.  In 
fact  dU  the  well  known  trades  are  represented. 

One  of  these  concerns,  a  very  large  printing  plant  doing 
practically  every  line  of  printing,  decided  sev^eral  years  ago  to 
change  from  a  ten-hour  day  to  one  of  eight  hours.  As  compe- 
tition in  most  of  their  work  was  very  keen,  the  change  could 
not  be  made  unless  costs  could  at  least  be  kept  from  increasing. 

The  situation  was  studied  for  many  months,  and  as  leaks 
and  wastes  were  found,  measures  to  stop  them  were  put  in 
effect.  Problems  of  power,  light,  heat,  humidity,  handling  of 
materials,  etc.,  were  studied  and  conditions  improved.  Ade- 
quate methods  of  planning  and  despatching  the  work  were  in- 
stalled, with  the  result  that  delivery  dates  were  met  and  idleness 
in  the  plant  reduced  to  a  minimum.  Finally,  the  eight-hour  day 
was  inaugurated  amid  great  rejoicing  on  the  part  of  the  em- 
ployees. In  fact,  the  good  feeling  engendered  was  so  deep 
rooted  that  it  is  still  very  much  alive  in  the  plant. 

The  company  also  has  had  every  reason  to  rejoice,  as  costs 
were  materially  reduced  and  profits  were  increased.  This  is 
shown  by  the  fact  that  the  stock  has  greatly  increased  in  price 
due  to  the  higher  dividends  paid. 

Since  then  most  printing  plants  have  been  forced  to  an  eight- 
hour  basis  and  many  have  lost  money.  In  fact,  a  number  have 
gone  into  bankruptcy. 

The  second  plant  in  consideration  is  a  large  concern  with 
over  5,000  employees  which  does  partly  commercial  and  partly 
government  work.     At  the  time  when  the  law  was  passed  re- 


PROBLEMS    OF   LABOR  141 

strlcting  work  on  government  contracts  to  eight  hours  per  day, 
this  plant  was  operating  on  a  ten-hour  basis  with  the  work 
divided  about  equally  between  the  commercial  and  the  govern- 
ment contracts.  All  of  the  contracts  had  been  taken  on  esti- 
mates made  up  on  a  ten-hour  basis.  As  the  law  made  no  pro- 
vision for  increasing  the  price  on  government  work  and  prices 
on  commercial  work  could  not  be  increased,  the  outlook  was 
gloomy.  Of  course  the  commercial  work  could  be  continued  on 
a  ten-hour  basis,  but  the  company  decided  to  throw  the  entire 
plant  on  eight  hours  and  take  the  consequences. 

Very  much  the  same  plans  were  followed  as  outlined  above 
in  the  case  of  the  printing  plant.  The  consequences  were  very 
satisfactory.  Every  contract  came  out  under  the  estim.ates,  and 
during  the  past  lean  years  the  plant  has  been  operating  at  full 
capacity  due  to  its  ability  to  underbid  competitors. 

A  nearby  competitor,  operating  under  nearly  the  same  con- 
ditions of  commercial  and  government  work,  continued  the  com- 
;^iercial  work  on  ten  hours  while  working  only  eight  hours  on 
government  contracts.  They  made  no  special  preparations  to 
meet  the  new  conditions,  but  continued  under  the  rule  of  thumb 
methods  with  the  result  that  they  lost  money  and  were  recently 
taken  over  by  their  financial  backers. 

The  third  concern  makes  a  household  article,  which  is  ex- 
tensively advertised  and  is  well  known  throughout  the  United 
.States  and,  to  some  extent,  abroad.  Their  product  requires  a 
continuous  operation  of  the  plant,  and  they  were  working  two 
shifts  of  eleven  and  thirteen  hours,  respectively.  Every  other 
plant  in  their  line  operates  under  these  conditions,  but  they  de- 
cided to  run  three  shifts  of  eight  hours  each.  Extensive  prepa- 
rations were  made,  as  in  the  other  cases,  but  with  the  exception 
that  plans  were  made  for  a  continuous  production  at  a  uniform 
rate  regardless  of  the  seasonable  fluctuations  in  the  sales.  This 
meant  that  the  production  exceeded  the  sales  in  some  seasons 
while  falling  short  of  the  sales  in  other  seasons.  However,  the 
plan  gave  the  great  advantage  of  steady  employment  and  of 
running  at  the  same  rate  throughout  the  entire  year. 

The  employees  were  taken  into  the  confidence  of  the  man- 
ager and  shown  where  the  reduced  hours  would  mean  changes 
in  their  duties  which  upset  all  the  traditions  of  the  trade.  With 
the  exception  of  a  single  employee  they  replied  that  they  did 
not  care  a  hang  for  the  traditions,  but  did  want  eight  hours. 
This  exceptional  employee  is  working  in  another  plant  under 
the    old    conditions    while    his    more  tractable    companions  are 


142  SELECTED   ARTICLES 

working  the  three  shift  plan  for  the  old  firm.  Incidentally  this 
plant  has  about  the  happiest  set  of  employees  to  be  found  any- 
where. 

As  in  the  other  cases,  the  costs  came  out  below  the  former 
figures,  and  this  year  the  concern  is  giving  the  consumer  more 
for  his  money.  The  sale  price  has  been  fixed  for  many  years 
and  it  was  not  deemed  advisable  to  make  a  reduction. 

A  very  recent  experience  of  a  firm  that  was  forced  to  the 
eight-hour  day  is  enlightening.  The  management  noticed  that 
the  employees  were  getting  ready  to  present  demands  for  an 
eight-hour  day  and,  in  order  to  forestall  trouble,  granted  them 
an  increase  in  pay  for  which  they  had  not  asked.  They  grum- 
blingly  accepted  the  increase  and  one  month  later  struck  for  and 
obtained  an  eight-hour  day.  The  management  has  very  ma- 
terially increased  its  difficulties  in  meeting  contract  prices. 
When  an  aggressive  man  w-ants  some  particular  thing,  he  may 
accept  something  else,  but,  nevertheless,  he  will  eventually  get 
what  he  wants. 

However,  as  a  plant  can  earn  money  on!}'  while  operating, 
why  should  it  stand  idle  seven-twelfths  or  two-thirds  of  the  pos- 
sible working  time?  Why  not  run  i6  or  24  hours  every  day 
except  Sundays  and  holidays?  Of  course  such  an  arrangement 
means  eight-hour  shifts,  but  is  a  sure  way  of  reducing  expenses 
in  most  plants. 

The  actual  effect  on  any  plant  is,  of  course,  dependent  upon 
the  propertions  of  the  labor,  material,  and  burden  costs,  but 
figures  recently  prepared  for  a  plant  may  be  used  for  an  illustra- 
tion. 

The  yearly  burden  figures  for  this  plant  when  operating  in 
different  ways  are  as  follows: — 

EIGHT  HOUR  SHIFTS 

3  shifts  2  shifts  i    shift 

Rent     $50,000  50,000  50,000 

Power     45, 000  28,000  1 2,000 

Insurance      10,000  8, 000  6,600 

Depreciation     .30.000  24,000  18,000 

Superintendence      29,800  23,200  16,600 

Interest      30,000  30,000  30,000 

Freight    20,000  14,000  7,000 

Shipping      12,000  8,000  4,000 

Repairs      15,000  10,000  5,000 

Supplies      6,000  4,000  2,000 

Shut   down   losses    2,600  15,000  15,000 

$250,400  214,200  166,200 

Pounds   produced    g. 000, 000         6,000,000         3,000,000 

Burden   per   lb $      0.0278  0.0357  0.0554 

Burden  per  lb    in  excess  of   3  shift  plan      0.0079  0.0276 


PROBLEMS    OF   LABOR  143 

In  these  figures  the  one  and  two  shift  plans  have  been  greatly 
favored  as  the  manufacturers  did  not  want  to  deceive  them- 
selves into  the  three  shift  plan.  The  power  account  includes  a 
very  heavy  figure  for  lighting  on  the  three  shift  plan.  Depre- 
ciation is  charged  off  at  a  lower  figure  on  the  two  and  one  shift 
plans  than  on  the  three,  although  it  should  be  practically  the 
same,  for  in  a  plant  where  all  equipment  is  kept  in  repair,  de- 
preciation is  an  item  to  cover  obsolescence.  Freight  and  ship- 
ping are  made  proportional  to  the  number  of  pounds  manufac- 
tured, although  they  would  be  actually  lower  in  proportion  on 
the  three  shift  plan,  as  that  plan  makes  a  carload  shipment  every 
day,  while  the  two  shift  makes  a  carload  every  day  and  a  half, 
and  the  one  shift  a  carload  ever}-  three  daj^s.  Even  with  these 
allowances  the  manufacturing  cost  is  overwhelmingly  in  favor 
of  continuous  operation. 

Other  items  of  administration,  sales,  and  general  office  ex- 
penses would  still  further  favor  the  three  shift  plan,  but  have 
not  been  considered  in  order  not  to  confuse  the  issue. 

The  selling  price,  in  the  case  considered  above,  allows  a  net 

profit  of  three   cents    ($0.03)    per  pound   over  the  cost   on   the 

three  shift  plan.     This  profit  is  reduced  to  $0.0221  on  the  two 

shift  plan  and  to  $0.0024  on  the  one  shift  plan.     The  total  profit 

on  the  3"ear's  operation  is  therefore  as  follows : — 

3  shift  2  shift  I   shift 

$270,000  $ij2,6oo  $7,200 

The  entire  possible  output  of  9,000,000  pounds  could  be  sold, 
but  to  manufacture  it  on  a  two  shift  plan  would  cut  the  profit 
down  to  so  low  a  figure  as  to  make  the  enterprise  unattractive, 
while  to  manufacture  the  amount  on  a  one  shift  plan  of  either 
eight  or  ten  hours  would  result  in  a  loss. 

In  most  industries  competition  is  steadily  becoming  more 
severe,  which  means  that  costs  must  be  reduced  and  labor  kept 
satisfied.  Modern  methods  of  management  combined  with  con- 
tinuous operation  of  plants  is  the  logical  solution  of  the  prob- 


LABOR'S    VIEWS   ON   THE   SHORTER 
WORKDAY^ 

Securing  the  shorter  workday  is  a  matter  engaging  not  only 
the  attention  of  the  working  people  of  the  United   States,   but 

1  From    the    American   Federationist.      November,    1919. 


144  SELECTED    ARTICLES 

ihc  attention  of  tlic  people  of  the  world.  The  masses  of  the 
working  people  in  all  those  countries  in  which  Labor  has 
reached  the  point  of  intelligence  and  forceful  participation  in 
the  direction  of  industrial  affairs  are  determined  that  the  length 
of  the  working  day  shall  be  commensurate  with  the  best  stan- 
dards of  health  and  happiness  and  that  excessive  hours  of  labor 
can  no  longer  be  tolerated. 

The  Executive  Council  in  dealing  with  the  subject  made  this 
statement  to  tlic  convention  at   Atlantic  City,  N.J.  June   iQio. 

Ill  another  scctirjii  (if  this  report,  tliat  is,  the  Recon.striictioii  Program 
of  the  American  Federation  of  Labor,  which  has  been  approved  by  us, 
the  subject  of  liours  of  labor  is  considered.  In  view  of  the  several  reso- 
lutions of  the  St.  Paul  Convention  dealing  with  the  subject  of  the  eight- 
hour  day  and  the  directions  of  the  convention  that  the  Executive  Coun- 
cil should  continue  its  work  along  the  line  of  the  shorter  workday  ac- 
tivities we  feel  it  necessary  to  tnake  further  reference  to  the  subject,  for 
there  is  nothing  in  which  Labor  is  more  vitally  interested  than  in  fewer 
hours  of  daily  toil  whereby  are  atTorded  leisure  for  rest  and  recuperation 
and  opportunity   for  the  things   that   make   life   worth    living. 

In  the  statistical  section  of  this  report  record  is  made  of  those  organi- 
zations which  have  been  sticcessful  during  the  year  in  establishing  the 
shorter  workday.  In  every  way  within  its  power  the  A.  F.  of  L.  through 
its  executive  officers  and  organizers  has  assisted  rhe  organizations  that 
have  made  the  struggle  for  the  shorter  workday. 

There  is  nothing  .-.pectacular  in  such  work.  It  is  the  steady  onward 
progresi  day  by  day.  Particularly  in  the  textile  industry  has  pro.gress 
been  made.  Many  of  the  workers  of  that  trade  now  enjoy  the  forty- 
four  hour  week.  Other  organizations  have  conducted  vigorous  and  fruit- 
ful campaigns   for   the   eight-hour   day   or   the   forty-four-hour   week. 

Few  other  years  have  shown  a  more  satisfactory  progress  in  the  re- 
duction of  the  length  of  the  workday  than  the  year  just  closed.  It  is 
significant  that  the  practical  value  of  the  shorter  workday  was  shown 
most  emphatically  during  that  period  of  the  nation's  life  when  the  utmost 
in    producion    was   required   to   satisfy  the   demands   of   war. 

The  satisfactory  results,  not  only  in  health  and  comfort  and  the 
general  well-being  for  the  workers,  but  in  volume  of  production  as  well 
were  demor.strated  durin?  the  war  beyond  all  question.  The  rapid  trend 
toward  the  general  establishment  of  the  shorter  workday  developed  dur- 
ing the  war  must  not  be  allowed  to  wane  during  the  period  of  recon- 
struction. 

In  order  that  the  subject  may  be  dealt  with  most  comprehensively 
and  completely  to  the  end  that  the  most  constructive  suggestions  may  be 
placed  before  the  convention,  we  recommend  that  the  entire  subject  be 
referred  to  the  Committee  on  Shorter  Workday  with  instructions  to  report 
to   this  convention   for   consideration    and   action. 

On  a  resolution  presented  to  the  convention  tlic  Committee 
on  Shorter  Workday  submitted,  and  the  convention  appro\ed  the 
following: 

VVilEREAS,  The  necessity  of  a  shorter  workday  and  a  shorter  work 
week  is  most  essential  to  the  full  economic  life  and  welfare  of  the 
workers;    and 

Whereas,  The  securing  of  the  shorter  workday  and  week  can  only  be 
accomplished  by  and  through  the  "roper  coordination  of  all  the  elements 
of  organized  labor  of  this  country  affiliated  with  the  A.   F.  of  L  :  and 

Wirr.REAs.  The  only  practical  method  of  inaugurating  such  shorter 
hours  of  toil  in  all  American  industry  where  it  has  not  as  yet  been 
established,  is  by  inauguratine  a  campaign  under  the  direct  supervision 
of  the  Executive  Council  of  the  A.  F.  of  L..  in  conjunction  with  the 
presidents    of    all    affiliated    national    rnd    international    organizations:    and 

Whereas,  This  campaign  should  begin  immediately  following  the  ad- 
journment  of  this  convention;   therefore,  be  it 


PROBLEMS    OF   LABOR  I45 

Resolved.  That  the  Executive  Council  of  the  A.  F.  of  L.  is  hereby 
authorized  and  instructed  to  call  a  conference  at  an  early  date  in  the 
citv  of  Chicago.  The  delegates  to  be  composed  of  the  presidents  of  all 
affiliated   national    and   international   organizations;    and.   be   it   further 

Resolved.  That  this  conference  is  directed  to  take  up  the  shorter 
workday,  to  consist  of  not  more  than  eight  hours  for  the  first  five  days 
of  the    week   and   not   to   exceed   four   hours   on    Saturday. 

Resolved,  That  this  conference  shall  exert  its  full  influence  and  power 
to  establish  within  the  shortest  possible  time,  the  intents  and  purposes 
as    set    forth    in    this    resolution. 

Your  committee  agrees  with  the  declaration  made  in  the  resolution 
that  there  is  necessity  for  a  shorter  work  week,  and  that  this  shorter  work 
week  can  only  be  accomplished  for  the  general  labor  movement  by  the 
coordination    of   all   the   branches    of   organized    labor   of   the   country. 

It  agrees  also  that  in  order  to  inaugurate  a  campaign  to  bring  about 
the  desired  result  on  a  shorter  work  week  proposition,  the  Executive 
Council  of  the  American  Federation  of  Labor  should  cooperate  with  the 
officers  of  international  and  national  unions  when  efforts  of  those  or- 
ganizations along  the  lines  mentioned  are  being  put  forth.  It  also  agrees 
that  a  campaign  on  the  shorter  workday  can  not  begin  too  soon,  but  it 
does  not  feel  that  it  would  be  wise  at  this  time  to  instruct  the  Executive 
Council  to  call  a  conference  at  a  specified  place  of  the  presidents  of  all 
affiliated  unions  or  that  this  convention  should  give  directions  to  such  a 
conference    if   one   is   called. 

Your  committee,  therefore,  recommends  that  this  convention  declare 
in  favor  of  the  eight-hour  day  as  a  maximum  workday  and  the  forty- 
four-hour  week,  and  instructs  the  Executive  Council  to  use  its  best  efforts 
in  assisting  any  organization  that  is  endeavoring  to  inaugurate  these  work- 
ing  hours. 

The  following  is  the  report  on  hours  of  labor  made  by  the 
Committee  on  Shorter  Workday  and  which  was  adopted  by  the 
convention. 

Reasonable  hours  of  labor  promote  the  economic  and  social  well-being 
of  the  toiling  masses.  Their  attainment  should  be  one  of  labor's  prin- 
cipal and  essential  activities.  The  shorter  workday  and  a  shorter  work 
week  make  for  a  constantly  growing,  higher  and  better  standard  of  pro- 
ductivity,   health,   longevity,   morals   and   citizenship. 

The  right  of  labor  to  fix  its  hours  of  work  must  not  be  abrogated, 
abridged    or    interfered    with. 

The  day's  working  time  should  be  limited  to  not  more  than  eight 
•  hours,  with  overtime  prohibited,  except  under  the  most  extraordinary 
emergencies.  The  week's  working  time  should  be  limited  to  not  more 
than    five    and    one-half    days. 

In  giving  consideration  to  a  shorter  workday  at  this  time  there  are 
many  things  to  be  taken  into  consideration  In  the  first  place  it  must 
be  realized  that  during  the  war  five  million  of  the  most  active  young 
men  in  the  country  were  taken  from  industries  for  war  service.  In  spite 
of  this  the  production  of  the  country  during  the  war  period  was  greater 
than  it  had  been  at  any  other  given  period  in  history.  Of  course,  this 
great  production  was  materially  assisted  by  the  introduction  of  woinen 
into  the  factories,  and  to  a  large  extent  the  elimination  of  the  liquor  in- 
dustry .'ind  taking  over  of  people  previously  engaged  in  that  work  for  war 
production. 

Labor  organizations  for  many  years  have  been  fighting  to  secure  the 
eight-hour  day,  once  known  as  the  shorter  workday.  This  eight-hour  day 
meant  forty-eight  hours  of  labor  per  week.  Because  of  the  changed  con- 
ditions brought  about  by  the  war  a  number  of  the  industries  have  been 
able  already  to  introduce  the  forty-four-hour  week,  continuing  the  eight- 
hour    day   with    a  half-holiday   on    Saturday. 

Only  twelve  years  ago  the  International  Typographical  Union  ex- 
pended more  than  four  million  dollars  in  securing  for  its  members  the 
forty-eight-hour  week  in  the  printing  industry.  At  the  present  time  that 
organization  is  negotiating  for  and  will  probably  receive  the  forty-four- 
hour  week  through  conciliation  and  without  the  expenditure  of  any  sum  of 
money.  The  garment  working  trades  have  succeeded  in  securing  the 
forty-four-hour  week.  Other  industries  have  done  or  are  doing  likewise. 
Your   committee   believes   it    will   be   but   a   short   time   until    the   eight-hour 


146  SELECTED  ARTICLES 

day    with    a    half-holiday    on    Saturday,    rneaning    a    forty-four-hour    week, 
will   be  the   universal   hours  of   labor  and  adopted   in   all   industries. 

While  this  is  most  desirable  and  your  committee  recognizes  that  the 
Executive  Council  has  used  all  its  available  power  for  the  purpose  ot 
assisting  in  bringing  about  a  forty-four-hour  work  week  in  all  of  the 
crafts   it   advises   this   conv<:ntion    to   go   even    further   than   this. 

There  is  at  the  present  time  a  large  volume  of  unrest  among  the 
vvorkingincn  on  this  continent.  There  can  be  no  doubt  but  that  there 
are  two  reasons  for  this  unusual  condition — first,  the  high  cost  of  the 
necessities    of   life;    second,    unemployment. 

Until  wages  are  so  adjusted  that  the  earnings  of  labor  will  buy  the 
same  amount  of  the  necessities  of  life  that  could  be  purchased  by  the 
earnings  previous  to  the  war,  this  unrestful  exhibit  by  the  working  people 
has  a  foundation  for  its  existence  that  can  not  be  set  aside.  Previous  to 
the  war  the  dollar  earned  by  Labor  would  buy  a  certain  amount  of  a 
certain  quality  of  food  and  clothing.  The  dollar  earned  at  the  present 
time  will  also  buy  a  certain  amount  of  a  certain  quality  of  food  and 
clothing  but  it  will  not  buy  the  same  amount  that  the  dollar  earned  pre- 
vious to  the  war  would  buy.  Until  this  gap  is  bridged  and  the  wages 
increased  so  that  the  same  amount  of  the  same  quality  of  goods  can  be 
bought  with  the  dollar  of  today  as  was  possible  before  the  war,  the  con- 
dition of  the  laborer  will  be  less  desirable  than  in  the  pre-war  period 
Manufacturers  and  employers  of  labor  should  recognize  this  fact  and 
increase         the         wages       to      this      point        without        any        controversy 

Regarding  unemployment.  It  is  almost  impossible  to  peruse  a  daily 
papei  without  finding  somewhere  in  its  columns  a  statement  that  every 
effort  should  be  put  forth  to  secure  employment  for  soldiers  returning 
from  across  the  sea  or  from  the  camps  maintained  in  this  country.  This 
is  a  most  laudable  effort  and  meets  with  the  approval  of  all  classes  of 
people.  However,  for  the  general  good  of  the  community  work  must 
also  be  provided  for  civilians  as  well  as  ex-soldiers.  If  there  is  not 
sufficient  work  in  the  country  to  give  the  returned  soldiers  steady  em- 
ployment and  at  the  same  time  give  continuous  employment  to  all  other 
people  seeking  work,  then  conditions  must  be  so  changed  that  all  of  these 
people  can  be  taken  care  of.  This  can  best  be  done  by  the  shortening 
of   the   hours   of   labor. 

There  is  no  doubt  but  that  in  the  near  future  many  organization' 
will  determine  that  in  order  to  take  care  of  all  of  their  members  gaining 
a  livelihood  by  employment  at  their  trade  it  will  be  necessary  to  in- 
augurate   a    six-hour    day. 

Your  committee,  therefore,  recommends  further  that  the  Executive 
Council  lend  its  assistance  in  the  fullest  degree  to  any  organization  seek- 
ing to  establish  a  shorter  workday  that  will  provide  for  the  employment 
of  all  its  members.  The  organization  itself  must  necessarily  be  the  judge 
of  what  should  be  the  length  of  the  workday  in  the  industry  over  which 
it  has  jurisdiction.  When  it  has  decided  and  established  its  claim  to 
shorter  hours,  no  matter  what  they  may  be,  then  the  American  Federation 
of  Labor  should  lend  its  fullest  assistance  and  your  committee  so  recom- 
mends. 


EXECUTIVE    COUNCIL    OF   THE    AMERICAN 

FEDERATION    OF    LABOR   ON    THE 

SHORTER   WORKDAY' 

It  is  an  accepted  principle  that  the  shorter  workday  is  a  fun- 
damental step  in  the  betterment  of  the  workers.  The  shorter 
workday  afTccts  the  length  of  life,  the  health,  the  standards  of 
life,  and,  in  fact,  every  phase  of  the  lives  of  the  workers.  The 
wage-earner  whose  hours  of  labor  are  decreased  goes  to  work 
and  comes  from  work  at  a  different  time  than  before,  and  con- 

'  From     American     Federationist.      23:181.      March,     igi6. 


PROBLEMS    OF   LABOR  147 

sequently  comes  in  contact  with  people  whose  habits  of  living 
are  different.  From  cor.tact  v/ith  these  people  of  greater  leisure, 
he  establishes  new  ideals.  He  has  a  greater  number  of  hours 
in  which  to  rest,  revive  his  energies  and  devote  to  recreation 
or  the  development  of  his  mind.  Thus  the  shorter  workday 
makes  of  the  worker  a  different  person,  a  person  of  greater 
physical  endurance,  greater  vitality,'  higher  ideals,  and  conse- 
quently a  person  who  will  not  be  satisfied  with  the  old  standards 
of  the  long  hours  of  work. 

The  improved  methods  of  production  which  always  follow 
a  reduction  in  the  hours  of  labor  increase  the  productive  power 
of  the  worker  and  consequently  he  is  in  a  position  to  demand 
and  receive  higher  wages.  Invariably  every  decrease  in  the 
hours  of  work  per  day  is  accompanied  or  followed  by  an  in- 
crease in  wages.  The  shorter  workday  movement  is  to  secure 
to  the  workers  greater  material  advantages.  It  is  an  important 
movement  in  conserving  national  vigor  and  health  and  in  guard- 
ing against  these  tendencies  that  undermine  true  national  power. 
From  this  is  evident  the  importance  of  the  action  of  the  Phila- 
delphia Convention,  in  adopting  the  following : 

"The  American  Federation  of  Labor,  as  in  the  past,  again  declares  that 
the  question  of  the  regulation  of  wages  and  the  hours  of  labor  should  be 
undertaken  through  trade  union  activity,  and  not  to  be  made  subjects  of 
laws  through  legislative  enactment,  excepting  in  so  far  as  such  regula- 
tions affect  or  govern  the  employment  of  women  and  minors,  health,  and 
morals;    and   employment   by   federal,    state   or   municipal   government." 


TRADES    WITH    THE    44-HOUR    WEEK' 

Summary  of  Movement  for  Shorter  Work-Day 
and  Work-Week 

Few  other  years  have  shov/n  such  reduction  of  the  length  of 
the  work  day  and  a  shortening  of  the  work  week  as  the  past 
two  years. 

Labor  organizations  have  for  many  years  been  urging  the 
eight-hours  day,  once  known  as  the  "shorter  work  day."  This 
eight-hours  day  meant  forty-eight  hours  of  service  per  week 
and  often  required  a  longer  work  day  than  eight  hours  for  the 
first  five  days  in  the  week  to  permit  the  observance  of  a  half- 
holiday  on  Saturday  after-noon. 

The  eight-hours  day  or  fortj'-eight-hours  week  is  almost  uni- 
versally observed  in  unionized  branches  of  American  industry, 

1  From  Industrial  Relations.  Bloomfields'  Labor  Digest.  1:57-8.  De- 
cember   6,    1919. 


148  SELECTED   ARTICLES 

During  the  war  and  since  the  signing  of  the  armistice,  there  has 
developed  among  the  unions  a  demand  for  a  shorter  work  week 
of  eight-hours  work  for  the  first  five  days  and  a  four-hour  work 
day  on  Saturday,  or  a  forty-four  hour  working  week. 

Such  44-hour  week  prevails  in  at  least  two  important  indus- 
tries, viz. :  the  building  and  clothing  industries.  Agreements 
have  also  been  entered  into  with  national  organizations  of  print- 
ing trades  employers  and  international  printing  trades  unions, 
providing  for  the  universal  observance  of  the  forty-four  work 
week  throughout  the  printing  industry  March  ist,  1921,  in  all 
its  various  branches  of  commercial  production. 

It  is  estimated  at  the  present  time  that  over  a  million  and  a 
half  organized  wage  earners  are  working  on  a  forty-four  hour 
work  week  schedule.  There  will  be  increasing  pressure  in 
almost  every  craft  and  occupation  for  the  forty-four  work  week 
schedule. 

From  figures  available,  it  is  estimated  that  nineteen  trades 
and  occupations,  which  are  national  in  scope,  are  working  on 
the  forty-four  hour  weekly  schedule,  affecting  directly  over  1% 
million  journeymen  work-men.  Eighteen  additional  trades  and 
occupations  have  established  this  sort  of  work  week  schedule  for 
certain  branches  of  their  crafts  or  followings.  The  chart  given 
below  illustrates  the  trades  and  occupations  where  the  forty- 
four  hour  work  week  is  established  and  observed  throughout 
the  trades  and  occupations  and  the  number  of  all  organized 
workers  affected : 

While  definite  figures  arc  not  at  hand  of  the  total  numbers 
of  workers  engaged  in  occupations  whose  members  are  in  part 
working  under  the  forty-four  hour  working  week  schedule,  it  is 
quite  safe  to  say  that  all  workers  on  building  operations  are  on 
this  shorter  work  week  schedule.  Unquestionably  other  trades 
and  occupations  not  enumerated  in  this  chart  and  who  are 
directly  employed  on  building  operations  are  likewise  working 
on  a  forty-four  hour  working  week  basis,  thus  augmenting  the 
mimber  of  workmen  who  arc  now  employed  on  a  forty-four 
hour  week  arrangement. 

In  the  printing  trades  the  shorter  work  week  is  quite 
generally  observed  in  all  the  mechanical  departments  of  news- 
papers, especially  amongst  the  workers  em.ployed  at  night.  This 
includes  compositors,  pressmen,  stereotypers,  proto-engravers 
and  mailers. 

In  the  commercial  branch  of  photo-engraving,  most  of  the 
employees  engaged  at  night  are  working  on  a  forty  to  a  forty- 


PROBLEM^    OF   LABOR  149 

four  hour  work  week  schedule  and  quite  a  proportion  of  these 
workers  employed  during  the  day  are  now  working  on  a  forty- 
four  hour  week  standard.  By  the  operation  of  existing  agree- 
ments and  those  in  process  of  negotiation  at  the  present  time, 
it  is  safe  to  say  that  by  January  i,  1920,  practically  the  entire 
C9mmercial  branch  of  photo-engraving  will  be  operating  on  the 
forty-four  hour  week  standard  for  the  day  men  and  a  lesser 
weekly  standard  for  those  employed  at  night. 

By  agreements  entered  into  with  the  National  Printing 
Trades  Employers  Association  and  the  several  International 
Printing  Trades  Unions,  the  forty-four  hour  work  week  will 
become  the  prevailing  standard  of  employment  throughout  the 
commercial  printing  industry  by  March  i,  1921,  which  in  addi- 
tion to  the  photo-engravers,  will  include  the  compositors,  press- 
men, electrotj'pers,  book-binders  and  mailers. 

It  is  thus  apparent  that  within  the  next  year  and  a  half,  the 
entire  commercial  printing  industry  will  be  operating  on  the 
shorter  work  week  schedule. 

Considerable  attention  was  given  this  subject  at  the  last  con- 
vention of  the  American  Federation  of  Labor,  held  in  Atlantic 
City  in  June  of  this  year.  A  special  committee  was  appointed 
to  deal  with  this  particular  proposal. 

The  American  Federation  of  Labor  intends  to  support  all 
affiliated  organizations  to  attain  the  forty-four  hour  working 
week,  and  it  is  preparing  to  assist  in  a  move  for  the  six-hour 
day  for  certain  trades  if  deemed  essential  to  maintain  members 
in  permanent  employment. 

Trades  Where  44  Hours  or  Less  per  Week  Prevail  at  Present. 

Organization  of  Length  of  Number  ol 

Trade   or   Calling                                                                         WdiU    Day      Work   Week  Workers 

Affected 

Asbestos    Workers     8  44  3,000 

Amalgamated    Clothing    Workers  I 

United    Garment    Workers               J   ^  ''"^  i7S.ooo 

Broom    and   Whisk   Makers    8  44  1,900 

Carpenters     8  44  320,000 

Carvers    (Wood)    8  44  900 

Draftsmen      8  4-2-44  5, 000 

Elevator    Constructors    8  44  3,018 

Fur   Workers    8  44  10,000 

Granite    Cutters     8  44  12,000 

Hod  Carriers    8  44  44,72 1 

Ladies  Garment  Workers    8  44  145,000 

Lathers     8  40-44  7,000 

Painters     8  44  505,000 

Plumbers      8  44  50,000 

Sheet    Metal    Workers    8  44  20,000 

Slate  and  Tile  Roofers   8  44  600 

Structural  Iron  Workers    8  44  21,000 

Window   Glass  Workers    6?4  38  4,600 


ISO 


SELECTED   ARTICLES 


The   Trades   and    Occupations    im    Which    Branches   of    Work   Ark 

Opbrating   cm    the    Forty-four    Weekly    Schedule    Are 

Illustrated   in   the   Following: 

Oraanltatlon  of  LenRtli  of         Number  of 

Trade  or  CalUnu  Work   Day     Work  Week     Workers 

Altected 

Blacksmiths     8  44-48       40,000 

Boot  and  Shoe  Workers   8  44-48       4i,54S 

Bottle    Blowers    8  45  10,312 

Cigar    Makers     8  45-48        40,000 

Copper    Plate    Printers    8  44-48  1,346 

Diamond    Cutters    8  46%  600 

Electrical     Workers     8  44-48        1 3,500 

Electrotypers    and    Stereotypers    8  44-48  5,Soo 

Flint    Glass    Workers    8  44-47  1,000 

Glove   Workers    89  44-50  950 

Machinists     8  44-48      460,000 

Pattern  Makers   8  44-48        10,205 

Paving   Cutters    8  44-48  2,800 

Photo-Engravers     8  "   40-48  5,400 

Pressmen      8  44-48  6,000 

Steel   Plate   Transferers    71/^-8       41^^-48  8' 

Teamsters      8-10  44-60        11,300 

Typographical    Workers     8  44-48        65,000 


MAXIMUM     VS.    MINIMUM    LEGISLATION 


1.  Public  opinion  is  back  of  the  niovcmcnt  to  shorten  hours 
and  I  am  heartily  in  favor  of  this  movement.  A  different  view, 
however,  should  be  taken  in  working  this  out  from  that  which 
has  been  taken  in  the  past.  I  believe  that  there  are  two  distinct 
phases  to  this  question :  first,  that  hours  should  not  be  so  long 
as  to  cause  fatigue,  and  second,  that  when  this  length  of  hours 
has  been  reached,  it  is  very  desirable  still  further  to  shorten 
hours  as  a  reward  for  efficiency. 

2.  Generally  speaking,  the  desirability  of  the  second  has 
been  confused  with  the  first  and  has  led  to  drastic  and  unintelli- 
gent legislation  without  consideration  of  the  facts.  In  my  opin- 
ion the  scope  of  legislation  should  be  strictly  limited  to  the  first 
proposition.  If  such  legislation  is  to  be  based  upon  facts,  the 
result  will  not  be  an  arbitrarily  hard  and  fast  limitation  of  an 
eight-hour  day  or  a  forty-eight-hour  week  applied  to  all  in- 
discriminately, regardless  of  conditions. 

3.  If  we  are  to  consider  the  facts,  the  industry  itself  must 
be  taken  into  consideration  from  every  point  of  view.  In  other 
words,  there  are  conditions  inherent  in  the  nature  of  the  indus- 
try that  should  govern  the  situation.  In  some  industries  wo- 
men are  required  to  perform  hard  manual  work  while  standing 

By  Richard  A.  Feiss,  Manager  Clothcraft  Shops,  Cleveland.  Annali 
of  the  American   Academy,  January,    19 17. 


PROBLEMS    OF   LABOR  151 

in  water  or  confined  to  work  rooms  that  have  to  be  especially 
heated  to  a  very  high  degree  of  temperature.  It  is  apparent  that 
the  maximum  limitation  of  hours  in  such  an  industry  should 
be  vastly  different  from  that  in  an  industry  having  good  whole- 
some surroundings  and  requiring  only  a  minimum  of  physical 
effort. 

4.  Moreover,  in  order  that  the  great  mass  of  workers  in  a 
scientific  organization  may  work  the  minimum  of  hours,  it  is  es- 
sential that  a  few,  whose  business  it  is  to  prepare  their  work  and 
whose  actual  efforts  are  generally  semi-clerical  and  intermit- 
tently performed,  work  a  greater  length  of  hours  than  would 
be  considered  a  proper  standard  for  the  general  working  force. 
For  example,  it  will  be  generally  conceded  that  the  great  mass  of 
executive  work  of  an  organization  requires  a  longer  time  for 
its  performance  than  that  of  the  general  body  of  workers  in  the 
shop.  Practical  legislation  must  not  only  take  this  fact  into 
consideration  but  must  also  provide  for  the  large  amount  of 
semi-executive  work  which  is  also  essential  in  a  well  organized 
plant  to  insure  against  the  usual  delays  and  other  obstacles  in 
furnishing  work  to  the  worker.  This  does  not  mean  that  the 
principle  of  limitation  of  hours  should  not  be  applied  to  all.  In 
fact  it  is  just  as  essential  to  have  the  hours  of  office  and  bank 
clerks,  household  servants  and  others  included  in  maximum  hour 
legislation  as  those  of  any  other  class  of  work.  I  believe,  how- 
ever, that  legislation  should  take  into  consideration  all  the  facts 
and  conditions  and  should  not  make  any  general  provisions, 
rather  making  limitations  dependent  upon  industry,  occupation 
and  other  specific  conditions. 

5.  In  the  construction  of  legislation  of  this  nature  I  wish 
particularly  to  call  attention  to  the  desirability  of  having  limita- 
tions set  rather  for  the  week  than  for  the  daj-;  Limitations  for 
the  day  should  be  of  such  a  nature  as  to  permit  weekly  limita- 
tions of  hours  to  be  used  up  in  any  five  days  in  the  week.  In- 
vestigations are  bringing  us  more  and  more  to  realize  that  cumu- 
lative rest  periods  at  the  end  of  the  week  are  more  valuable  than 
shorter  rest  periods  scattered  through  the  week.  We  believe  that 
further  investigation  will  undoubtedly  prove  that  it  is  a  most 
beneficial  plan  for  workers  to  work  somewhat  longer  periods 
during  five  days  in  the  week  in  order  to  get  two  days  of  com- 
plete relaxation  at  the  end  of  the  week.  It  is  our  opinion  that 
in  the  near  future  the  ideal  week  for  the  worker  will  consist 
of  five  full  days  of  work  and  two  full  days  of  rest.    Unintelli- 


15-^  SELECTED    ARTICLES 

gent  legislation  is  one  of  the  greatest  obstacles  to  this  attain- 
ment. 

0.  1  \vi>h  particularly  to  call  attention  to  the  fact  that  the 
sphere  of  legislation  should  consist  in  setting  maximum  limi- 
tations. Very  often  the  minimum  or  at  least  the  actual  standard 
desired  is  set  up  as  the  maximum,  the  practical  result  being 
quite  diiierent  from  that  intended  by  those  who  support  this 
kind  of  legislation.  X'atually,  the  result  is  neither  .sound  nor 
fair. 

/.  Ill  t!u'  vast  majority  of  industries,  and  in  fact  in  all 
industries  involving  consecutive  or  continuous  manufacture,  it 
is  al)solutel\-  essential  that  a  small  group  of  workers  work  a 
lillle  more  than  normal  hours  occasionally  in  order  that  the 
remainder  of  the  workers  in  the  business  do  not  materially 
suffer.  Tiiese  extra  hours  of  c>vertime,  while  sincerely  de- 
precated ]>y  all,  do  not,  however,  become  a  burden,  because  in 
the  ordinary  course  i.f  things  they  are  distributed  and  occa- 
sionally fall  on  this  group  and  occasionally  on  that  group  of 
workers.  In  its  effect  upon  any  one  group  it  amounts  to  a 
very  small  fractidii  of  time,  but  it  is  very  essential  to  the  rest 
of  the  organization  and  should  be  provided  for  by  intelligent 
legislation.  To  provide  for  the  above  practical  contingency  the 
maximum  limitation  of  hours  can  be  set  somewhat  higher  than 
tile  actual  effect  desired.  Eor  example,  if  the  maximum  is  fifty 
or  fifty-two  hours  a  week,  the  average  regular  time  in  a  factory 
will  necessarily  be  about   forty-eight  hours  or  less. 

Fig.  I  will  show  the  chart  of  a  tj^pical  day's  work  in  a  sci- 
entifically managed  factory.  This  will  illustrate  the  fact  that, 
where  work  consists  of  a  series  of  consecutive  operations,  the 
length  of  tinu'  worked  by  different  operators  varies  considerably, 
and  while  in  this  instance  there  are  a  very  few  operators  whose 
work  covers  a  i)crio(l  of  nine  hours  or  a  little  over,  the  working 
time  of  the  vast  majority  is  considerably  less.  So  the  record 
for  any  week's  work  in  ihe  same  factory  would  show  a  few 
operators  working  about  fifty  hours,  while  the  actual  hours  of 
work  average  between  forty-three  and  forty-four. 

Another  way  to  meet  contingencies  of  this  kind  is  to  have 
the  law  provide  for  a  standard  working  schedule  to  be  properly 
posted  in  every  work  room  with  a  certain  additional  number 
of  hours  extra  time  permitted  with  certain  other  restrictions. 
There  are  of  course  many  other  ways  for  meeting  this  and 
similar   contingencies   which   have   to   be    faced   in    the   practical 


PROBLEMS   OF  LABOR  153 

working  out  of  legislation  of  this  kind.  The  chief  thing  to  my 
mind  in  the  working  out  of  reasonable  legislation  should  be  the 
taking  into  consideration  of  facts  and  their  results  and  a  full 
realization  that  the  facts  in  each  case  should  be  the  subject 
of  scientific  investigation  by  experts.  That  the  opinion  of  ex- 
perts is  valuable  goes  without  saying.  That  consideration  of 
the  subject  from  this  point  of  view  is  practicable  I  need  only 
refer  to  a  recent  paper  of  Professor  Frederic  S.  Lee  of  Colum- 
bia University  entitled  "Is  the  Eight-hour  Working-day  Ra- 
tional?"^ In  this  article  Professor  Lee  speaks  of  a  classifica- 
tion, on  a  physiological  basis,  of  work  and  workers: 

Such  a  study  is  not  impossible,  and  it  would  afford  the  only  basis 
for  a  rational  and  really  intelligent  solution  of  the  problem.  It  would 
doubtless  lead  to  the  establishment  of  no  rigid,  but  an  elastic  system 
in  which  the  work  would  be  adapted  to  the  worker,  and  the  worker  to 
the  work.  In  one  industry  the  duration  of  labor  might  be  eight  hours, 
in  another  it  might  be  more  or  less  than  eight  hours.  So  too,  within  n 
single  industry  one  worker  might  labor  longer  than  another.  Such  a 
solution  could  be  made  to  satisfy  both  economic  and  social  demands  ami 
lead    to    the    maximinn    of    individual    and   national    efficiency. 


WHERE   TIME   IS    MONEY  =•' 

The  most  important  thing  in  the  labor  contract  is  the  item 
concerning  wages.  Under  the  pressure  of  war  prices  there  is  a 
growing  tendency  to  pay  in  accordance  with  the  cost  of  living 
— a  movement  that  is  sure  to  mean  greater  comfort  to  the 
workers,  not  only  during  the  war  but  after  it.  Second  in  im- 
portance, from  the  wage-earner's  standpoint,  but  very  near  the 
top  of  the  list  nevertheless,  is  the  question  of  hours.  Here,  too, 
the  war  has  been  influential  in  bringing  about  changes  that  will 
be  of  great  and  lasting  benefit  to  labor. 

The  idea  has  widely  prevailed  for  years  that  the  tendency 
toward  shorter  hours  of  labor,  and  especially  toward  the  eight- 
hour  day,  was  constant  and  marked.  Yet  strange  to  say,  the 
census  figures  have  not  justified  such  a  belief.  The  1910  census 
showed  that  in  1909  onh-  about  8  per  cent  of  the  6,600,000  wage- 
earners  then  engaged  in  manufacturing,  worked  forty-eight 
hours  or  less  in  a  week.  In  the  five-year  period  following,  there 
was  a  slight  iinprovement.     In  1914  the  number  of  wage-earners 

^  Read    before     the     Section     on    Industrial     Hygiene    of  the    American 

Public  Health  Association,  Cincinnati,  October  25,  1916.  Appearing  in 
the  November   24,    19 16,   issue  of  Science. 

"By   John    A.    Fitch.      Survey.      39:494-5.      February    2,  1918. 


154  SELECTED   ARTICLES 

was  over  7,000,000  and  those  who  worked  forty-eight  hours  or 
less  in  a  week  represented  nearly  12  per  cent  of  the  total. 

But  a  change  came  with  the  year  1914.  Since  then  there 
has  been  a  constant  and  rapid  extension  of  the  eight-hour  day. 
Early  in  1916  an  attempt  was  made  to  measure  its  progress  by 
checking  up  reports  appearing  in  newspapers  and  elsewhere. 
After  correspondence  with  many  firms  and  trade  unions,  Ruth 
Pickering  was  able  to  estimate  in  the  Survey  for  April  i,  1916, 
that  in  the  previous  ten  months  100,000  men  had  achieved  the 
eight-hour  day  in  the  United  States.  At  the  end  of  that  year, 
Dorothy  Kirchwey  Brown  brought  the  study  down  to  date  by 
using  the  same  methods.  Writing  in  the  Survey  of  January  9, 
191 7,  she  expressed  the  belief,  based  on  figures  which  she  pre- 
sented, that  in  the  year  1916,  400,000  wage-earners  had  secured 
the  eight-hour. 

Last  fall  a  later  and  official  statement  appeared.  In  the 
Monthly  Review  of  the  United  States  Bureau  of  Labor  Statis- 
tics for  September,  191 7,  an  estimate  was  made  of  the  number 
of  wage-earners  securing  the  eight-hour  day  in  1915,  1916  and 
in  the  first  six  months  of  1917.  The  information  was  taken 
from  leading  trade  union  periodicals,  labor  papers,  trade  jour- 
nals, daily  papers  published  in  various  parts  of  the  country, 
annual  and  other  reports  issued  by  officers  of  labor  organiza- 
tions, and  replies  to  inquires  made  by  the  bureau.  On  the 
basis  of  the  information  thus  secured,  the  bureau  reported  a 
total  of  1,051,703  employes  as  having  secured  the  eight-hour  day 
during  the  time  covered. 

Included  in  this  number  were  400,000  railway  employes.  It 
seems  doubtful,  however,  whether  these  should  be  counted. 
There  had  been  no  investigation  of  railway  practice.  It  was 
assumed,  apparently,  that  the  passage  of  the  Adamson  law  gave 
the  train  crews  an  eight-hour  day.  This  is  not  a  safe  assump- 
tion. But  if  the  railroad  men  are  left  out  there  remains  a  total 
of  651,703 — a  greater  number  securing  the  eight-hour  day  in 
two  and  a  half  years  than  the  total  number  in  manufacturing 
industries  who  had  it  in  1909. 

Undoubtedly  this  movement  is  due  in  large  part  to  the 
scarcity  of  labor  and  the  necessity  of  conciliating  those  workers 
who  are  available.  Another  consideration  that  must  have  had 
a  great  deal  of  weight,  is  the  new  knowledge  that  has  been 
acquired  since  the  outbreak  of  the  war  on  the  subject  of  fatigue 
and  its  relation  to  output.    Probably  nothing  that  has  ever  been 


PROBLEiMS    OF   LABOR  155 

published  has  had  a  more  profound  influence  in  this  respect 
than  the  reports  of  the  British  Committee  on  the  Health  of 
Munition  Workers.  That  England,  in  order  to  achieve  her 
maximum  efficiency  and  be  in  a  position  to  carry  on  a  war  with 
the  utmost  vigor,  should  actually  curtail  working  hours  and 
frown  upon  overtime  and  Sunday  work,  is  a  fact  of  far  too 
great  significance  to  go  unheeded. 

But  there  has  been  a  considerable  amount  of  experience  in 
this  country  which  has  had  its  influence.  The  great  increase  in 
production  at  the  plant  of  the  Ford  Motor  Companj%  after 
working  hours  had  been  reduced  from  nine  to  eight,  has  been 
frequently  pointed  out.  Other  companies  have  been  making 
experiments.  The  Cleveland  Hardware  Company,  a  concern 
employing  several  thousand  men,  had  a  regular  working-day 
three  years  ago  of  nine  hours.  For  years  the  company  had  ex- 
perienced a  busy  season  in  the  middle  of  the  winter,  during 
which  it  was  customary  to  work  one  hour  overtime.  Three 
years  ago  when  the  time  came  for  going  on  the  ten-hour 
schedule,  the  management,  which  had  been  studying  the  matter, 
decided  to  run  straight  through  the  busy  season  on  the  old 
nine-hour  schedule.  Superintendents  and  foremen  were  horri- 
fied. They  expressed  the  belief  that  the  company  would  not  be 
able  to  fill  its  orders.  Nevertheless,  the  rule  was  adopted  and 
overtime  was  abolished.  At  the  end  of  the  year  when  they 
checked  up  results,  they  found  that  it  had  been  the  year  of  largest 
production  in  the  history  of  the  company.  The  next  year  when 
the  time  for  the  busy  season  arrived,  instead  of  trying  to  meet 
it  with  the  regular  working  schedule,  the  management  took  an 
hour  off,  and  the  whole  force  went  on  the  eight-hour  day. 
Again,  foremen  and  superintendents  expressed  their  misgivings 
and  again  the  workers  produced  more  goods  than  ever  before, 
exceeding  their  work  of  the  previous  j-ear. 

Last  winter  the  Cleveland  Hardware  Company  carried  its 
experiment  one  step  further.  There  is  a  large  steam  hammer 
in  the  plant,  which  proved  inadequate  for  the  handling  of  all 
the  work  to  be  done.  It  was  decided  to  install  another  hammer 
of  similar  type.  While  it  was  being  installed  the  work  was 
piling  up  and  the  men  proposed  that  they  work  in  shifts  of  six 
hours  each,  instead  of  eight.  Only  two  men  are  employed  on 
the  hammer,  so  it  was  not  an  extensive  experiment.  It  is  in- 
teresting to  note,  however,  that  after  taking  two  hours  more 
from  their  working  day,  each  team  of  men  working  six  hours 


156  SELECTED   y\RTICLES 

so  greatly  increased  their  efficiency  that  they  were  able  to  turn 
out  very  nearly  as  great  a  product  in  six  hours  as  they  had 
formerly  done  in  eight. 

From  the  men's  point  of  view,  the  experiment  was  not  en- 
tirely satisfactory,  for  on  a  piece-work  basis  their  earnings  were 
not  quite  as  great  as  before.  After  the  new  hammer  was  in- 
stalled, they  went  back  to  the  eight-hour  schedule.  The  experi- 
ment did  show,  however,  that  i\t  least  in  that  kind  of  work  the 
maxinnmi  of  human  efficiency  is  to  be  expected  in  a  working 
day  somewhere  between  six  and  eight  hours  in  length. 

A  similar  experience  has  been  that  of  the  Commonwealth 
Steel  Company,  in  an  industry  where  it  had  not  been  supposed 
that  the  eight-hour  day  would  lead  to  an  increased  output. 

At  the  Cloth  Craft  Shops  of  the  Joseph  and  Feiss  Company 
in  Cleveland,  the  standard  working  day  is  eight  hours,  and  the 
weekly  hours  up  to  January,  1917,  were  forty-four.  At  that 
time  the  management  proposed  to  the  employes  that  the  shop 
shut  down  on  Saturday  altogether,  and  that  the  four  hours 
formerly  worked  on  Saturday  be  distributed  through  the  other 
five  days  of  the  week.  The  idea  was  based  on  the  known  fact 
that  the  employes — or  at  any  rate  the  girls,  who  are  in  the  ma- 
jority— frequently  do  housework  in  addition  to  their  work  in 
the  factory  and  are,  consequently,  under  an  added  physical  strain. 
Some,  even  if  they  have  no  general  housework  to  do,  make  their 
own  clothes  or  do  their  own  laundry  work.  It  was  believed 
under  the  circumstances  that  two  full  days  of  freedom  from  the 
factory  would  react  favorably  on  individual  efficiency  in  the 
shop. 

The  result  has  more  than  justified  the  expectation.  It  was 
not  long  before  the  w^orkers  were  accomplishing  as  much  in  five 
days  as  they  formerly  did  in  five  and  one-half,  and  doing  it 
within  the  eight-hour  limit,  too.  Advantage  can  now  be  taken 
of  the  week-end  as  never  before.  Some  of  the  employes  go  to 
the  country  on  Friday  night  and  return  refreshed  and  invigor- 
ated late  Sunday  afternoon. 

That  the  movement  toward  an  eight-hour  day,  and  generally 
toward  shorter  hours  of  labor,  is  gathering  headway  and  will 
continue  on  purely  economic  grounds,  is  indicated  not  only  by 
the  trend  in  the  past  months  but  by  other  evidences  at  hand. 
There  is  no  industry  where  long  hours  of  labor  have  more 
persistently  been  maintained  than  in  steel-making.  Yet  I  was 
told  by  a  steel  manufacturer  last  summer  that  he  is  convinced 


PROBLEMS    OF    LABOR  157 

of  the  effectiveness  of  the  eight-hour  day,  and  that  the  only 
reason  why  he  does  not  now  install  it  is  that  he  does  not  know- 
where  he  could  get  the  extra  men.  He  told  me  that  as  soon 
as  the  war  is  over  and  men  are  easier  to  get,  he  will  put  in 
three  shifts  of  men  throughout  the  plant  in  place  of  the  two- 
shift  system  now  prevailing. 

It  is  altogether  likely  now  that  the  understanding  of  the 
necessity  and  value  of  the  eight-hour  day  has  become  so  general, 
that  the  movement  will  go  of  its  own  weight.  But  there  are 
certain  forces  that  will  accelerate  its  movement.  The  unions 
stand  as  a  unit  for  the  eight-hour  day.  They  mean  to  have  it 
by  whatever  route  it  may  come.  In  the  past,  the  unions  have 
been  opposed  to  legislation  for  the  shorter  work  day.  Samuel 
Gpmpers  has  strenuously  opposed  it.  The  eight  hours  must 
come  by  union  activity — by  collective  bargaining,  not  b\'  law. 
Three  times  has  a  convention  of  the  American  Federation  of 
Labor  voted  down  a  resolution  favoring  legislation  as  a  means 
of  securing  eight  hours.  The  radicals  and  the  westerners  were 
for  it,  the  conservatives  and  the  easterners  were  against.  But 
of  late  a  change  seems  to  have  come  about.  Mr.  Gompers 
worked  hard  for  the  passage  of  the  Adamson  law,  to  feive  the 
eight-hour  day  to  the  train  crews.  In  neither  of  the  last  two 
conventions  of  the  American  Federation  of  Labor  was  the  issue 
directly  raised,  but  resolutions  were  adopted  without  debate  that 
seemed  to  indicate  a  shifting  from  the  traditional  position. 

And  now,  within  a  month,  the  New  York  State  Federation 
of  Labor  has  adopted  a  resolution  favoring  legislation  not  only 
for  an  eight-hour  day   but  for  a   Saturday  half -holiday. 

With  this  shifting  of  the  point  of  view  of  the  unions,  the 
new  attitude  of  the  courts  on  this  question  becomes  of  greater 
importance.  For  a  dozen  years,  after  the  adverse  decision  in 
the  Lochner  case  involving  a  ten-hour  law  for  bakers  in  New 
York,  it  had  been  assumed  that  a  law  fixing  a  limit  on  the 
hours  of  labor  of  grown  men  would  be  unconstitutional.  Mis- 
sissippi was  the  first  to  challenge  the  bugaboo.  A  ten-hour  law 
was  passed  there  a  few  years  ago.  It  went  to  the  Supreme 
Court  of  the  state  and  the  law  was  sustained  in  a  decision  which 
laid  down  the  principle  of  the  "inalienable  right  to  rest."  This 
was  encouraging,  but  the  question  remained  in  doubt,  neverthe- 
less, until  last  year,  when  the  Supreme  Court  of  the  United 
States  in  the  case  of  Bunting  vs.  Oregon,  definitely  affirmed  the 
right  of  a  state  to  regulate  hours  of  labor  for  men. 


158  SELECTED   ARTICLES 

If  the  unions  want  to  go  ahead,  then,  and  Rct  eight-hour 
laws  passed,  they  will  not  find  the  courts  standing  in  tlie  way. 
It  is  probable,  though,  that  they  will  continue  to  make  their 
gains,  for  the  most  part,  through  economic  rather  than  legisla- 
tive methods.  But  no  matter  which  road  they  choose,  the  move- 
ment will  be  hastened  by  a  constantly  increasing  weight  of  evi- 
dence of  the  wisdom  of  the  eight-hour  day.  It  is  this  weight  of 
evidence  which  has  not  only  enlisted  on  their  side  the  greater 
part  of  the  enlightened  public,  but  is  rapidly  bringing  into  line 
the  employers  too. 


MAXIMUAI    VS.    MINIMUM    HOUR 
LEGISLATION ' 

There  is  obviously  the  greatest  possible  need  for  immediate 
action  on  the  part  of  the  Government  to  deal  with  the  hours 
question  on  a  national  basis.  Otherwise  every  trade  in  the  coun- 
try will  certainly  have  its  own  dispute  on  the  question,  and  the 
settlement  of  all  these  disputes  will  take  a  very  long  time  and 
will  indefinitely  postpone  the  reorganization  of  industry.  In 
face  of  the  urgent  demand  of  labor,  something  has  to  be  done — 
and  done  at  once.  The  big  manufacturing  and  employing  in- 
terests have  met  and  passed  a  strong  resolution  urging  the 
Government  to  do  nothing  to  grant  the  demands  that  are  being 
made  until  a  full  inquiry  has  reported  on  the  ability  of  British 
industry  to  bear  the  shorter  hours  demand.  In  view  of  labor's 
very  definite  attitude,  such  resolutions  are  hardly  helpful.  A 
settlement  must  be  reached  soon,  and  it  is  the  height  of  folly 
to  attempt  to  postpone  it  to  the  distant  future. 

The  main  motives  that  have  led  to  so  urgent  a  demand  on 
the  part  of  labor  are  two-fold.  Much  the  most  important  mo- 
tive is  the  obvious  one — the  claim  for  more  adequate  leisure 
and  a  better  chance  to  lead  a  pleasant  and  reasonable  life. 
The  demand  for  shorter  hours  is  essentially  a  human  demand, 
and  one  which  must  be  met  on  human  grounds.  The  overwork 
of  war-time,  which  was  itself  but  a  continuation  of  the  overwork 
of  pre-war  times,  will  not  be  allowed  to  continue  any  longer ; 
and,  in  their  determination  to  abolish  it,  the  workers  have  been 
immensely  strengthened  by  the  revelation  of  our  immense  pro- 
ductive capacity  which  the  war  has  furnished.     It  has  also,  of 

•  P'rom  an  article  by  G.  D.  H.  Cole.  New  Republic.  18:247-9.  March 
22,    1919. 


PROBLEMS    OF   LABOR  159 

course,  been  reinforced  by  the  spectacle  of  war  profiteering, 
and  is  now  being  stimulated  further  by  the  astonishing  activity 
of  the  Government  in  divesting  the  nation  of  its  industrial 
property,  and  restoring  to  the  full  every  form  of  private  profi- 
teering which  it  had  been  compelled  by  war-time  necessities  to 
restrain.  The  workers  are  sure — far  surer  than  they  have  ever 
been^that  there  is  wealth  enough  for  everybody,  given  a  just 
distribution  of  the  national  product,  and  given  also  a  reason- 
able ordering  of  production. 

Far  behind  the  human  motive  in  ultimate  importance,  but 
still  a  very  material  factor  in  the  present  situation,  is  the  fear 
of  unemployment  and  its  effects,  and  a  desire  to  secure  the 
speedy  absorption  into  industry  both  of  the  returning  soldiers 
and  of  the  war  workers  who  are  suffering  discharge.  The 
strength  of  this  second  motive  varies  very  greatly  from  case  to 
case.  It  is  exceptionally  strong  in  the  mining  industry,  where 
great  difficulty  has  already  been  experienced  in  absorbing  the 
men  returning  from  the  army  without  displacing  those  already 
at  work — a  difficulty  which  has  already  led  to  several  local 
strikes  of  importance.  It  is  also  important  in  the  engineering 
and  woodworking  trades,  which  are  bearing  the  brunt  of  war 
discharge,  and  also,  strangely  enough,  in  the  buildnig  industry, 
which,  thanks  to  the  apathy  of  the  Government,  still  shows  no 
immediate  sign  of  revival,  despite  the  appalling  shortage  of 
houses.  On  the  other  hand,  it  naturally  counts  for  Httle  on  the 
railways  where  every  available  man  is  still  required. 

There  is  in  some  quarters,  especially  among  economists, 
a  tendency  to  sneer  at  this  motive,  and  to  point  out  that  it  is 
"unsound  economically"  to  reduce  hours  of  labor  in  order  to 
provide  for  the  unemployed.  The  alternative,  we  are  told,  is  the 
provision  of  work.  This  argument  would  be  sound  only  if  two 
conditions  were  fulfilled:  first,  if  the  prevailing  hours  of  labor 
were  already  short  enough ;  and  secondly,  if  the  Government 
had  made  in  advance  its  preparations  for  the  provision  of  alter- 
native work.  As  neither  of  these  conditions  is  fulfilled,  surely 
the  workers  are  fully  justified  in  pressing  for  the  immediate 
adoption  of  the  shorter  hours  which  they  would  in  an^''  case 
demand,  and  in  using  as  an  auxiliary  argument  the  need  for 
absorbing  the  unemployed. 

What,  it  will  be  asked,  ought  the  Government  of  the  United 
Kingdom  to  do  in  face  of  the  present  situation?     I  believe  that 


i6o  SELECTED   ARTICLES 

it  ought  at  once  to  announce  and  put  into  operation  a  compre- 
hensive scheme  for  deaUng  with  unemployment.  But  it  ouglit 
to  do  more  than  this.  It  ought  to  tackle  tiic  whole  hours  ques- 
tion on  a  comprehensive  basis,  and  to  do  for  the  industries  of 
the  countr\-  as  a  whole  what  it  did  under  pressure  for  the 
miners  some  years  before  the  war.  'I "he  lime  is  ripe  for  a  imi- 
versal  Eight  Hours  act,  applicable  to  all  trades  and  callings, 
and  including,  of  course,  special  provisions  dealing  with  the 
hours  of  child  labor.  It  would  not  be  possible  to  settle  details 
in  such  a  measure ;  but,  given  the  general  principles  and  their 
intended  application  to  weekly  and  daily  employment,  the  va- 
rious trades  could  readily  work  out  the  details  for  themselves. 
An  Eight  Hours  act  could,  of  course,  only  prescribe  a  maxi- 
mum day :  it  would  not  prevent  the  miners,  or  any  other  indus- 
try' having  special  conditions,  from  pressing  for  a  lower  maxi- 
mum of  hours;  but  it  would  bring  order  out  of  the  present 
chaos  of  conflicting  demands  and  provide  general  principles  in 
which  the  various  claims  could  be  argued  out.  That  would  be 
an  inestimable  advantage,  and  may  well  be  the  only  way  of 
avoiding  chaos. 

The  hours  question  has  come  to  a  head  first  in  the  United 
Kingdom ;  but  it  is,  of  course,  far  from  being  a  merely  national 
issue.  The  problem  of  the  international  regulation  of  the  hours 
of  labor  forms  one  of  the  principal  questions  which  will  have 
to  ]iv  dealt  with  by  the  I'eacc  Conference,  and  the  solution 
arrived  at  will  have  to  be  incorporated  in  the  proposed  Inter- 
national Labor  charter.  Moreover,  it  is  more  than  probable 
that  the  hours  question  will  be  the  principal  factor  in  the  in- 
dustrial demands  of  labor  in  almost  all  civilized  countries. 
There  are  already  signs  enough  that  it  is  in  the  forefront  of 
labor's  claims  in  other  countries  besides  the  United  Kingdom. 
The  lead  which  is  now  being  given  by  organized  labor  in  the 
United  Kingdom  will  be  followed  up  elsewhere;  and  if  the 
British  Government  gives  a  lead  in  meeting  that  demand,  its 
action  also  will  be  of  international  consequences.  Among  purely 
industrial  labor  questions,  the  hours  question  is  at  the  present 
time  by  far  the  most  important,  and  its  importance  is  significant 
of  the  human  character  of  the  new  demands  of  labor^of  the 
insistence  on  the  right  not  only  to  reasonable  remuneration  for 
work  done,  but  also  to  reasonable  leisure  as  an  essential  part 
of  a  reasonable  "standard  of  living." 


PROBLEMS    OF    LABOR  161 

THE    SIX    HOUR    DAY' 

Tile  Hours  of  Labor 

There  is  a  point  I  would  like  to  touch  upon,  and  that  is  the 
hours  of  labor.  I  promulgated  a  scheme  which  was  called  a  six- 
hour  working  daj^  and  it  has  very  often  given  the  impression — 
and  I,  myself,  of  all  people  in  the  world,  cannot  tell  how  it  came 
about, — that  I  was  advocating  something  that  would  add  to  the 
cost  of  production,  that  would  limit  production  and  that  would 
generally  bring  on  the  downfall  of  industries  in  any  iirm  or 
country-  that  adopted  it. 

On  the  contrary,  my  ideal  is  exactly  the  opposite.  I  du  not 
know  what  the  hours  of  work  in  this  country  were  a  century 
ago.  I  know  what  the}'  were  in  my  own  countr.\-,  unhappily.  At 
the  beginning  of  the  nineteenth  century  men  worked  for  four- 
teen hours  a  day,  and  women  worked  beside  them  the  same  num- 
ber of  hours,  and  down  in  the  mines  women  had  to  work,  and 
children  of  nine  years  of  age.  They  had  to  toil  down  in  the 
mines,  and  even  children  of  six  years  of  age  worked  in  the  cotton 
mills.  The  employers  of  those  days  said  that  any  shortening  of 
the  hours,  anj-  restriction  or  limitation  on  woman  labor  or  child 
labor,  would  be  ruinous  to  the  industry. 

You  have  only  got  to  search  through  the  debates  in  the 
British  Parliament,  as  I  have  done,  to  find  that  that  wa.s  the  cry 
of  the  opposition.  There  were  one  or  two  fine  spirits  who  o])- 
posed  that  sort  of  thing  and  who  tried  a  reduction  from  fourteen 
to  twelve  hours,  and  were  able  to  stay  and  to  demonstrate  that, 
instead  of  a  reduced  output,  they  got  an  increased  output,  that 
the  human  being  produced  more  in  twelve  hours  than  in  four- 
teen. Then,  from  twelve  hours,  which  was  the  first  limitation 
we  had  in  England,  the  hours  were  limited  to  ten. 

That  was  some  sixty  years  ago,  when  ten  hours  was  made  a 
days"  work  for  a  workman.  Women  were  limited  as  to  the 
occupations  they  covdd  enter,  and  the  age  for  child  labor  was 
raised  to  thirteen  years.  And  again  the  industry  became  more 
prosperous ;  not  only  so,  but  the  employers  became  more  pros- 
perous.    Everybody  became  more  prosperous. 

The  Eight-Ffour  Day 

W'e  are  now  up  against  this  problem  We  have  had  an  eight 
hours'  da>'  for  many  years  in  England.     The  eight  hours'  day  re- 

1  From  an  address  by  Lord  Leverhidmc  before  the  Boston  Chamber  of 
Commerce    November    25,    19 19. 


102  SELECTED  ARTICLES 

suits  in  this,  that  men  and  women  enter  our  industry,  at 
monotonous  occupations,  at  lathe,  loom  or  bench,  at  fourteen 
years  of  age,  and,  if  their  physical  strength  holds  out,  continue 
until  they  are  seventy,  when  they  are  entitled  to  an  old  age  pen- 
sion of  very  meagre  dimension.  They  must  toil  in  factory  and 
work  shop  during  all  the  hours  of  the  day  that  are  comprised 
in  those  eight  hours. 

Saturday  afternoon  has  always  been  a  holiday  with  us,  for 
over  sixty  years.  Therefore,  the  number  of  hours  of  work,  as  a 
rule,  has  been  the  nine  hours  or  eight  and  one-half  hours  o!i 
every  day  except  Saturday,  and  on  Saturday  the  employees  \\  ork 
in  the  forenoon  and  have  the  afternoon  off,  making  forty-ei^ht 
hours  of  work  in  the  week. 

Petition  From  the  Girls 

What  was  the  result?  I  will  tell  you  how  my  attention  was 
called  to  this  matter.  It  was  through  a  little  petition  sent  to  me 
from  the  work  girls  in  the  factory,  saying  that  since  the  hours 
for  the  closing  of  the  shops  had  been  altered  in  Liverpool  they 
had  no  opportunity  to  do  their  shopping  on  Saturday. 

The  shops  also  closed  in  London  on  Saturday  afternoons  al 
one  o'clock,  and  the  girls,  therefore,  found  that  they  had  no  time 
for  shopping.  They  asked  if  they  might  have  an  opportunity  to 
do  their  shopping,  and  I  want  to  show  you  how  reasonable  the 
request  they  made  was.  It  was  nothing  of  a  terrifying  nattirc, 
but  was  a  perfectly  reasonable  request.  They  simply  asked  that 
they  might  have  one  afternoon  off  in  the  month  to  do  their  shop- 
ping. 

It  set  me  to  thinking,  and  it  seemed  to  me  that  we  could, 
by  a  little  change  in  our  organization,  so  increase  our  output, 
reduce  our  cost  and  at  the  same  time  reduce  the  hours  of  labor, 
that  both  men  and  girls  could  have  one  morning  or  afternoon 
off,  not  in  a  month,  but  in  alternate  weeks,  with  benefit  to  them- 
selves. 

Where  It  Will  Work 

Of  course,  I  want  j'ou  to  understand  the  limitations  of  this 
proposal.  The  limitations  are  these,  that  where  the  cost  of  pro- 
duction, of  the  interest  and  depreciation  on  machinery,  interest 
on  capital  employed,  salaries  of  the  permanent  staff,  where  these 
charges  are  equal  to  the  weekly  wage  bill,  you  can  apply  it     that 


PROBLEMS    OF   LABOR  163 

is,  in  cases  where  j'ou  can  reduce  the  cost,  reduce  the  hours,  in- 
crease the  output,  and  consequently  reduce  the  cost  of  the  fin- 
ished product. 

Where,  as  in  many  industries,  the  interest  on  the  capital  em- 
ploj-ed,  the  interest  on  the  cost  of  machinery  and  buildings,  the 
rates  and  taxes,  and  all  these  outgoings  which  have  to  be  in- 
curred in  any  case,  are  less  than  the  weekly  wage  bill,  then  at 
present,  if  that  system  were  adopted,  it  would  have  to  be 
adopted  because  of  other  reasons  than  reduced  cost  of  produc- 
tion and  increased  output. 

But,  fortunately  for  the  workmen  in  industries  of  the  char- 
acter of  which  I  am  speaking,  where  it  is  not  possible  to  adopt 
it  and  still  reduce  the  cost  of  production  by  increasing  the  output 
— the  greatest  example  of  which  with  us  is  farming — the  health 
of  the  employee  is  not  affected  by  the  impossibility  of  reverting 
to  a  shorter  working  day.  The  man  working  on  a  farm  has  a 
variety  of  occupation. 

The  seasons  afford  him  a  variety,  each  day  affords  him  a 
variety.  But  not  so  with  the  man  in  a  monotonous  engineering 
shop  or  a  mill,  or  at  the  loom,  nor  a  woman  at  these  occupations. 
Therefore,  in  occupations  where  it  is  not  possible  to  do  this  to- 
day it  may  be  possible  to  do  it  tomorrow — as,  for  instance,  in 
agriculture,  when  it  employs  more  machinery  and  men  become 
less  and  less  and  machines  more.  But  in  those  occupations  the 
health  of  the  men  is  not  suffering,  nor  the  health  of  the  women, 
as  it  is  in  our  closed,  confined,  monotonous  factories. 
Put  First  Things  First 

So  that  we  can  complacently  set  ourselves  to  the  task  of 
dealing,  first,  v>-ith  those  people  and  those  occupations  where 
health  is  affected.  Why  common  humanity  demands  that  we 
should  commence  in  that  way. 

Our  care  for  the  health  of  our  citizens  demands  that  we 
should  begin  in  that  way;  and  later  on,  I  am  convinced,  as  in 
connection  with  all  these  works,  appetite  grows  with  what  it 
feeds  on,  and  that  when  we  have  got  a  thoroughly  organized 
system  of  two  shifts  each  day,  six  hours  each,  in  our  foundries 
and  factories,  with  an  output  increased  thereby  by  fifty  per  cent 
in  a  72-hours'  week  instead  of  the  48-hours'  week,  with  these 
fixed  charges  of  interest,  depreciation,  and  so  on,  divided  over 
an  output  fifty  per  cent  greater,  vchen  we  have  got  that  working 
smoothly  we  shall  find  that  it  will  be  having  its  effect  on  these 
other  industries. 


i64  SKLKCTED    ARTICLES 

THE    SIX    HOURS   DAY' 

What  the  workers  are  asking  for  is  more  life  and  liberty,  a 
fuller  and  a  freer  satisfaction  of  their  needs  as  human  beings. 
Of  course,  they  want  for  this  a  larger  share  of  the  wealth  they 
produce.  But  they  recognize  that  war  is  not  a  wealth-producer, 
and  in  their  present  wage  demands  they  are  rarely  asking  for 
more  than  a  return  to  their  pre-war  standard  of  subsistence. 
This  moderation  serves  to  bring  out  into  strong  relief  the  gen- 
eral demand  for  shorter  hours.  The  forty-hours'  week,  or  even 
the  six-hours'  day,  has  suddenly  won  its  way  to  the  front  place 
in  the  demands  of  labor.  The  eight-hours'  day  took  a  genera- 
tion of  crying  in  the  wilderness  before  it  entered  the  practical 
politics  of  industr}-,  and  gradually  crept  into  the  standard  of  a 
few  strong  and  favored  trades.  But  this  new  demand  is  not 
simply  a  next  step.  It  is  a  definite  new  challenge  to  our  indus- 
trial order.  For  it  is  not  based  upon  the  old  economic  contention 
that  workers  have  hitherto  been  wastefully  employed,  in  that 
they  are  able  and  willing  to  put  out  the  same  amount  of  produc- 
tive power  in  a  shorter  as  in  a  longer  working  day.  No  doubt  it 
is  sometimes  urged  that  just  as  an  eight-hours'  day  was  found  as 
advantageous  as  a  ten-hours'  day  from  the  standpoint  of  output, 
so  a  further  reduction  of  hours  may  be  similarly  found  almost 
costless.  But  this  is  not  the  real  contention  of  the  advocates  of 
the  six-hours'  day.  They  do  not  pretend  that  speeding-up  will, 
or  ought  to,  compensate  for  the  loss  of  hours.  They  say  that  is 
not  their  concern.  What  they  are  after  is  liberation  from  the 
machine.  They  want  more  time  and  energy  to  live  their  own 
lives  and  take  their  part  in  whatever  life  can  bring. 

For  what,  after  all,  is  the  free  life  of  a  worker  after  the  full 
factory  day,  or  even  the  eight-hours  day,  which  means  at  least 
a  nine-hours'  day  in  the  works,  the  pit,  or  on  the  railway? 
Week  in,  week  out,  il  is  a  too  heavy  tax  upon  the  body  and  the 
mind  of  all  but  the  strongest.  It  exhausts  the  nervous  energy, 
stamps  its  mechanical  routine  upon  the  soul,  and  disables  its  vic- 
tims for  any  beneficial  use  of  leisure.  There  is  much  dull,  heavy, 
and  uninteresting,  even  dangerous,  work  that  has  to  be  done. 
Workers  do  not  refuse  to  do  it.  But  they  insist  that  it  shall  be 
reduced  to  such  time  and  other  conditions  as  shall  not  stamp  its 
nature  upon  tlieirs.  It  is  not  enough  that  there  shall  be  a  bare 
margin  of  free  time  to  recover  from  exhaustion  before  the  next 

*  Nation    (London)-      March    8,    1019     p.    671-2. 


PROBLEMS    OF    LABOR  165 

day's  work  begins.  What  is  wanted  is  so  wide  a  margin  as  to 
reduce  mechanical  servitude  to  a  subordinate  place  in  their  lives. 
If  it  takes  a  full  quarter  of  their  hours,  that  suffices. 

This  does  not  signify  a  life  of  idleness,  or  even  dissipation, 
as  middle-class  moralists  sometimes  suggest.  A  little  leisure  is 
a  dangerous  thing,  especially  the  leisure  of  physical  and  nervous 
exhaustion.  It  is  upon  a  large  leisure  that  the  hopes  of  human- 
ity rest,  a  leisure  large  enough  to  provide  for  every  man  the 
opportunity  to  cultivate  his  human  tastes  and  aptitudes.  This 
does  not  mean  that  less  wealth  will  be  produced,  if  wealth  be 
taken  in  its  true  meaning;  for  health,  family  life,  education, 
reading,  art,  recreation,  would  far  more  than  compensate  some 
loss  in  material  output. 

But  must  material  output  suffer?  Must  the  nation  pay  for 
more  leisure  by  any  reduction  of  the  economic  product?  This 
challenging  question  is  met  by  one  of  our  most  successful  men 
of  business.  Lord  Leverhulme,  with  a  triumphant  negative.  The 
opening  part  of  his  interesting  volume,  "The  Six-Hours'  Day", 
sets  forth  the  case  of  this  great  reform,  basing  it  upon  the  ma- 
chine-economy. Machinery,  instead  of  the  tyrant,  is  to  be  the 
liberator  and  the  friend  of  the  worker.  It  is  to  increase  his 
wages  and  to  make  him  moral  and  intelligent. 

The  modern  machine  knows  nothing  of  religion  or  moral  laws,  yet  it 
is  one  of  the  greatest  religious  and  moral  teachers  the  world  has  pro- 
duced in  modern  times.  However  far  and  wide  we  extend  mechanical 
abilities  and  machine  power,  we  come  finally  to  the  necessity  of  pro- 
viding intelligent  and  careful  men  for  their  control  and  running.  Ma- 
chines cannot  run  alone,  and  workmen  of  skill,  high  character  and  moral 
conduct  are  essential  to  successful  control."  "All  the  tendencies  of  the 
greater  use  of   machinery   are   in   the   direction   of   improving  man. 

It  might,  perhaps,  appear  that  man  could  not  have  too  much 
of  this  benevolent  and  moralizing  influence.  But  one  of  the 
greatest  boons  this  universal  benefactor  is  able  to  bestov/  is 
leisure.  For  there  are  two  important  characteristics  of  modern 
machinery;  it  is  extremely  expensive,  and  it  can  work  all  day 
without  tiring.  Therefore,  the  costher  the  machine,  the  more 
important  to  make  it  work  long  hours.  But  since  no  man  can 
here  keep  pace  with  the  machine,  you  must  set  two,  three,  or 
even  four  men,  in  relays  to  do  it.  At  present,  a  great  deal  of 
more  expensive  plant  is  only  utilized  for  eight  or  nine  hours  a 
day,  and  the  product  is  what  a  single  shift  of  overworked  men 
or  women  can  get  out  of  it  in  that  time. 

Wherefore  this  waste?  "We  must  have  a  six-hours'  work- 
ing day  for  men  and  women,  and  by  means  of  six-hour  shifts 


i66  SELECTED   ARTICLES 

we  must  work  our  machinery  twelve,  eighteen,  or  even  twenty- 
four  hours."  This  can  be  done,  without  reduction  of  wages  on 
the  shorter  day,  in  all  industries  where  the  cost  of  production  in 
overhead  charges  is  as  great  or  greater  than  the  cost  of  wages. 
This  is  Lord  Leverhulme's  contention.  The  cost  of  the  shorter 
day  can  be  recouped  in  great  part  by  this  greater  volume  got  out 
of  the  plant.  Since  in  most  well-equipped  factories  and  work- 
shops to-day  the  cost  in  overhead  charges  is  at  least  double  the 
cost  in  wages,  this  economy  is  immediately  applicable  to  these 
great  sections  of  industry.  To  less  advanced  industries,  and  to 
such  occupations  as  agriculture,  it  cannot  at  once  be  fully  ap- 
plied. But  as  labor-saving  machinery  advances  in  these  back- 
ward industries,  so  the  same  econom.j-  will  apply.  Of  course,  it 
it  were  to  turn  out  that  the  worker  produced  as  large  an  output 
in  the  six  as  in  the  eight  hours,  the  problem  would  be  greatly 
simplified,  for  the  reform  would  cost  nothing,  and  the  fuller 
utilization  of  the  plant  would  be  pure  gain,  going  in  higher 
wages,  bigger  profits,  or  lower  prices,  according  to  the  forces 
controlling  distribution. 

Lord  Leverhulme  cites  a  good  deal  of  evidence  to  sliow  that 
a  shortening  of  the  work-day  is  not  attended  by  a  reduction  of 
output.  But  most  of  tbis  evidence  is  in  experiments  of  shorten- 
ing the  full  factory  day,  and  only  one  or  two  cases  go  so  far  as 
ro  support  the  view  that  a  reduction  from  eight  to  six  hours 
would  be  attended  by  no  loss  of  output.  It  is  obvious  that  some 
limit  to  the  economy  of  shorter  hours  must  exist,  and  it  is 
probable  that  men  will  not  turn  out  quite  so  much  in  a  six  as  in 
an  eight-hours'  day.  But,  then,  they  haven't  got  to  is  Lord 
Leverhulme's  contention,  provided  that  the  machine-economy 
makes  up  the  loss.  After  the  war,  it  will  be  particularly  im- 
portant to  work  our  existing  buildings  and  plant  more  fully 
because  additional  fixed  capital  will  not  for  some  time  be  pro- 
curable. On  the  other  hand,  there  will  be  abundance  of  spare 
labor  to  fill  up  a  two  or  three  shift  system.  The  millions  of  men 
and  women  released  from  the  fighting  forces  and  from  Govern- 
ment work  of  various  kinds  can  only  find  lucrative  employment 
by  some  such  expansion  in  demand  for  labor. 

The  chief  objection  Lord  Leverhulme  feels  called  upon  to 
meet  is  the  embarrassment  of  so  much  riches,  i.e.,  the  question 
of  disposing  of  so  large  an  increase  of  output  as  would  be  got 
by  his  double  or  treble  shift  system.  But  the  difficulty  is  not 
serious.     For,  if  the  worker  got  as  much  money  on  a  six  as  on 


PROBLEMS   OF   LABOR  (67 

an  eight-hours'  shift,  and  millions  more  workers  were  brought 
into  employment,  the  purchasing  power  of  the  working  classes 
would  be  so  increased  that  they  themselves  would  furnish  most 
of  the  enlarged  demand,  while  the  reduced  cost  per  unit  of  the 
output  would  enable  the  expanding  foreign  markets  to  take  off 
the  residue.  Economists  might,  perhaps,  reasonably  question 
whether,  with  rising  wages,  cost  would  be  so  reduced.  But  we 
are  disposed  to  think  that  Lord  Leverhulme's  main  thesis  is 
strong  and  fruitful.  The  great  problem  before  us  is  how  to  re- 
duce the  proportion  of  human  to  non-human  physical  energy  in 
the  production  of  material  wealth.  And  it  is  clearly  in  the  main 
a  problem  of  intelligent  organization  of  existing  and  available 
resources.  We  want  more  wealth  with  less  toil.  We  must  i-e- 
organize  our  pre-war  system  of  industry,  if  the  problem  is  to  be 
solved.  The  powerful  instinctive  demand  for  shorter  hours  will 
compel  the  most  conservative  and  unenlightened  employers  to 
make  their  business  interests  square  with  the  plain  dictates  of 
humanity. 

For  business  men  can  think,  when  they  are  put  to  it.  The 
unperfections  of  most  human  arrangements  are  so  great  and 
numerous  as  to  admit  quite  easily  of  large  improvements  when 
thuse  responsible  are  pricked  by  the  spur  of  necessity.  This  is 
why  the  workers  are  so  obtuse  to  the  argument  thai  such  and 
sucli  a  new  demand  must  raise  prices,  ruin  the  trade,  and  then 
where  will  the  workers  be?  They  know  that  thought  and  cou- 
tii'vance  have  in  the  past  found  a  sufficient  loophole  of  escape 
from  ruin,  and  they  have  enough  confidence  in  the  brains  and 
resourcefulness  of  the  employers  to  believe  that  if  they  have  to 
put  up  with  a  six-hours'  day  without  reduced  pay,  they  will 
somehow  manage  to  foot  the  bill,  and  leave  a  margin  of  profit. 


(b)    Night  Work 

THE    BAKING    TRADE' 

The  Report  on  Night  Work 

The  Committee  appointed  by  the  Minister  of  Labour  in  April 
last  "to  inquire  into  the  practice  of  night  work  in  the  bread 
baking  and  flour  confectionery  trade,  and  to  report  whether  it 

*  From  The  Month'i  Work.  (BritUh  Ministry  of  Labour)  2:33.  Augnist, 
1919. 


i68  S!':L!<:CT1:D    AK'ilCLES 

is  desirable  in  the  interests  of  those  engaged  in  the  trade  and 
of  the  community  that  the  practice  should  be  abohshcd  or  modi- 
fied," have  now  presented  a  report,  recommending  the  abolition 
of  night  work  after  an  interval.  The  Committee  sat  on  23 
occasions  between  24tli  April  and  4th  July,  1919,  heard  65  wit- 
nesses, and  considered  written  evidence. 

The  report  commenced  with  a  survey  showing  the  extent 
of  night  work  in  normal  times,  and  sketched  the  history  of 
the  agitation  against  night  work  by  referring  to  the  resolutions 
passed  by  the  Trade  Union  Congresses  and  the  attempts  made 
to  abolish  it  by  legislation  since  184S.  These  attem.pts  were  un- 
successful. One  effect  of  the  Bread  Order,  1917,  which  was  in- 
troduced to  secure  economy  in  the  consumption  of  cereals  by 
prohibiting  the  sale  of  "new"  bread,  was,  however,  as  a  side  issue 
to  modify  night  work  very  considerably.  In  the  opinion  of  the 
Committee  the  removal  of  the  Bread  Order  would  not  result  in 
the  re-introduction  of  night  work  to  such  a  degree  as  it  had 
existed  before  the  Order,  because  agreements  have  liecn  made 
between  Trade  Unions  and  Employers'  Associations  abolishing 
night  work  in  various  districts. 

The  case  put  forward  by  the  employers  was  that  night  work 
was  necessary  in  many  districts  in  order  to  meet  the  legitimate 
dciiiaiid  of  the  public  for  fresh  bread,  and  to  ensure  its  delivery 
(luring  ordinary  busmess  hours.  This  was  specially  the  case 
with  large  wholesale  bakers  whose  delivery  was  spread  over  a 
large  area.  The  operatives,  on  the  other  hand,  stated  that  night 
work  was  detrimental  to  health,  that  it  interfered  with  the  nor- 
mal and  social  life  of  the  w'orkpeople,  and  that  in  any  case  it 
was  unnecessary,  as  the  public  could  be  supplied  with  fresh 
bread  under  a  day  work  system. 

The  Committee  decided  that  there  was  no  justification  for 
the  continuation  of  night  work  in  the  Baking  Trade,  and  they 
recommended  that  legislation  should  be  introduced  prohibiting 
the  employment  of  men  in  bakehouses  between  the  hours  of  11 
p.m.  and  5  a.m.,  except  in  the  cases  of  doughmen  and  firemen. 
Certain  further  exceptions  were  also  provided  for,  including  one 
night  per  week  to  cope  with  the  week-end  trade ;  exemptions  not 
exceeding  ten  nights  in  the  year  to  provide  for  public  holidays; 
for  a  certain  stated  period  in  towns  doing  a  seasonal  trade,  or 
where  there  was  a  sudden  influx  of  visitors ;  also  in  the  event 
of  a  breakdown ;  or  during  the  repair  of  plant,  etc.  The  opera- 
lion  of  the  proposed  Act  would  not  extend  to  bakers  working 


PROBLEMS    OF    LABOR  i6q 

on  their  own.  and  employing  no  labour,  unless  it  can  be  shown 
that  bakers  employing  labour  are  put  at  a  disadvantage  by  their 
competition. 

Li  order  to  allow  the  Trade  to  adjust  itself  to  these  condi- 
tions, it  is  recommended  that  they  should  not  come  into  opera- 
tion until  two  years  from  the  passing  of  the  Act,  but  it  was 
suggested  that  the  Principal  Secretary  of  State  should  have 
power  to  make  an  order  applying  local  agreements  in  any  dis- 
trict without  delay. 

The  Report  recommended  also  that  provision  should  be  made 
to  enable  leaseholders  to  make  alterations  to  premises  and  plant 
rendered  necessar}'  by  the  change  from  night  to  day  baking,  if 
lessors  should  refuse  consent. 


TENURE  OF  EMPLOYMENT 

A  DISMISSAL  WAGE:  TWO  WEEK'S 
EXTRA  PAY' 

A  Safety  Check  on  the  Dangers  of  Rapid  Firing 

In  a  mature  and  humane  civilization  great  importance  is  at- 
tached to  the  economic  security  of  the  individual.  As  the  civil 
service  develops,  the  public  employee  is  protected  in  various 
ways  against  abrupt  and  arbitrary  dismissal.  In  universities  it 
is  customary  to  notify  the  instructor  a  considerable  time  in  ad- 
vance of  the  termination  of  his  employment.  The  professor  is 
usually  given  a  year's  notice  or  else  his  salary  is  continued  for 
at  least  a  half  year  after  his  services  are  dispensed  with.  School 
boards,  hospitals,  churches  and  non-gainful  organizations  gener- 
ally feel  that  it  is  indecent  to  cut  off  a  faithful  servant  without 
giving  him  a  reasonable  time  to  look  around  for  another  place. 
Even  from  private  employers,  professional  men  are  usually  able 
to  secure  an  agreement  not  to  end  relations  without  a  month 
or  more  of  notice. 

On  the  other  hand,  the  common  practice  of  American  indus- 
trial employers  is  really  amazing  in  its  lack  of  consideration  for 
the  worker  found  superfluous.  No  doubt  many  firms  take  a 
pride  in  building  up  and  maintaining  a  stable  labor  force  and 
give  serious  attention  to  the  plight  of  the  men  they  have  to  drop. 
But  the  average  employer  seems  to  give  himself  not  the  slightest 
concern  as  to  what  is  to  become  of  the  worker  let  out  thru  no 
fault  of  his  own.  I  have  heard  of  a  firm  long  aware  of  the 
necessity  of  curtailment  waiting  till  half  an  hour  before  the 
evening  whistle  blew  to  post  a  notice  throwing  hundreds  of  men 
out  of  a  job  for  an  indefinite  time!  Since  Americans  are  not 
generally  inhumane,  the  barbarous  "firing"  policy  so  character- 
istic of  our  industries  can  be  accounted  for  only  as  a  survival 
from  the  time  of  the  small  concern  when  the  competent  work- 

1  By   Edward  A.    Ross,  Professor  of  Sociology,   University  of   Wiscon- 

lin.      Independent.      97:365-6,    384.      March    15,    1919. 


172  SF.Ll-XTKD    ARTICLES 

man  dismissed  could  walk  around  the  corner  and  get  a  job  just 
as  good.  That  such  is  not  the  case  today  may  be  learned  by 
simply  interviewing  workingmen  as  to  what  loss  of  job  has 
meant  to  them.  What  tales  of  tramping  the  streets  looking  for 
work,  of  rushing  hither  and  thither  on  a  rumor  that  this  firm 
or  that  is  taking  on  men,  of  returning  night  after  night  worn 
out  and  discouraged  to  an  anxious  family,  of  the  frantic  cutting 
down  of  household  expenses,  the  begging  of  credit  from  butcher 
and  grocer,  the  borrowing  of  small  sums  from  one's  cronies,  the 
shattering  of  hopeful  plans  for  the  children !  Here  are  real 
tragedies,  hundreds,  nay  thousands,  of  them  a  year  in  our  larger 
centers,  yet  the  general  public  goes  its  way  quite  unconscious'! 
No  wonder  among  wage-earners  the  bitter  saying  runs,  "A 
workingman  is  a  fool  to  have  a  wife  and  kids." 

What  of  the  far  greater  number  who  are  employed  con- 
tinuously but  who  are  always  worrying  lest  they  lose  their  jobs 
without  warning?  From  conversation  with  wage-earners  one 
gathers  that  fear  of  finding  a  blue  slip  in  the  pay  envelope  really 
poisons  life  for  multitudes.  So  long  as  many  employing  con- 
cerns move  in  the  present  ruthless  inscrutable  way,  not  deigning 
to  give  their  men  any  advance  hint  of  what  will  happen  to  them, 
there  will  be  resentment  and  unrest  in  the  ranks  of  labor,  no 
matter  how  reasonable  the  hours  and  pay. 

The  tragedy  in  the  situation  of  the  wage-earner  in  the  mod- 
ern industrial  organization  has  been  his  insecurity.  Step  by  step 
wc  have  lessened  this.  Mechanics'  lien  laws  did  away  with  the 
risk  of  losing  his  pay,  postal  savings  banks  with  the  risk  of 
losing  his  savings,  "safety  first"  with  the  risk  of  preventable  in 
dustrial  accidents,  accident  compensation  with  the  risk  of  los- 
ing livelihood  by  injury  in  his  work,  pensions  with  the  risk  of  a 
destitute  old  age.  The  chief  insecurity  which  remains  is  that 
of  losing  one's  job.     How  can  we  lessen  that? 

There  is  no  virtue  in  the  suggestion  that  the  law  should  re- 
quire either  party  to  give  a  fortnight's  notice  before  terminating 
relations.  The  workman  who  has  received  notice  will  be  of 
little  use  the  ensuing  two  weeks  and  the  average  employer  would 
prefer  to  make  him  a  present  of  his  wages  and  let  him  go.  On 
the  other  hand  if  the  workmen  were  obliged  to  give  notice  two 
weeks  before  quitting  they  would  lose  their  sharpest  weapon — 
the  sudden  strike. 

The  true  policy  is  to  establish  for  the  workman  who  has  been 
with  the  employer  long  enough  to  establish  the  presumption  that 


PROBLEMS    OF    LABOR  173 

he  is  of  value — say  six  months — the  legal  right  to  receive  a  fort- 
night's free  wages  when  he  is  dismissed  without  fault  on  his 
part.  This  would  give  him  two  weeks  to  look  about  and  find 
himself  another  job.  Even  if  he  has  nothing  saved  up  and  no 
credit  it  would  be  a  month  or  more  before  his  family  came  into 
acute  distress.  There  are  few  competent  men  who  cannot  find 
a  job  in  a  month  unless  times  are  hard  and  during  hard  times 
their  resources  will  be  an  altogether  different  provision,  viz., 
unemployment  insurance.  Still  more  important,  however,  is  the 
consideration  that  the  man  who  has  made  good  on  the  job  and 
continues  to  make  good  would  be  relieved  of  the  haunting  fear 
of  offhand  dismissal.  It  will  not  pay  his  employer  to  fire  him 
for  frivolous  reasons  and  if  business  is  slack  the  men  let  out 
will  be  men  recently  taken  on,  who  have  not  yet  established  the 
ri^ht  to  the  dismissal  wage. 

The  dismissal  wage  should  not  be  looked  upon  as  something 
held  back  out  of  wages  which  a  man  will  never  get  unless  he  is 
"fired."  It  should  be  regarded  in  the  light  of  the  "compensa- 
tion for  disturbance"  which  some  countries  allow  the  evicted 
tenant  who  has  farmed  the  land  well. 

Of  course  the  man  who  "fires  himself"  by  persistent  negli- 
gence or  misconduct  should  get  no  dismissal  wage,  and  since 
an  unscrupulous  employer  might  charge  fault  when  there  is 
none,  there  will  have  to  be  local  boards  to  hear  complaints  on 
this  score. 

The  employee  who  quits  of  his  own  free  will  to  take  a  better 
job  or  do  something  else  has  no  claim.  But  since  such  an  em- 
ployee might  "soldier"  or  grow  careless  just  in  order  to  get 
himself  "fired"  the  employer  must  have  the  right  to  escape  pay- 
ing him  a  dismissal  wage  by  proving  to  the  local  board  that  he 
is  "soldiering."  As  a  matter  of  fact  no  workman  could  afford 
to  get  the  reputation  among  employers  of  being  that  kind  of 
a  man. 

Until  we  have  accident,  sickness  and  old  age  insurance,  in- 
competency arising  from  accident,  sickness  or  old  age  would  not, 
of  course,  release  the  emploj^er  from  the  obligation  to  pay  a 
dismissal  wage.  The  dismissal  wage  might  be  combined  with 
a  system  of  unemployment  insurance  by  providing  that  the  un- 
employment allowance  should  not  begin  until  the  end  of  the 
term  for  which  free  wages  is  paid. 

The  legal  dismissal  wage  should  not  become  involved  with 
strikes  and  lockouts.     Let  the  rule  be  that  the  striker  has  not 


174  SELECTED   ARTICLES 

relinquished  his  job  any  more  than  the  man  who  has  been  absent 
on  account  of  sickness.  When  the  man  resumes  his  job — 
whether  on  his  terms  or  on  the  employer's — he  has  whatever 
rights  he  had  when  he  struck.  Only  in  case  he  applies  for  his 
job  and  is  refused  is  he  entitled  to  a  dismissal  wage.  If  he 
never  applies,  he  gets  nothing. 

Let  the  lockout  be  looked  upon  as  if  it  were  a  temporary 
stoppage  owing  to  a  fire  or  a  dearth  of  fuel  or  raw  material. 
When  the  men  are  taken  on  again  all  is  as  before.  If  they  stay 
away  they  get  nothing.  If  they  are  refused  their  old  jobs  they 
get  the  dismissal  wage. 

If  the  employer  goes  bankrupt  his  men's  dismissal  wages 
constitute  precisely  the  same  kind  of  claim  on  his  assets  as  their 
back  wages. 

Since  an  employer  could  always  avoid  dismissing  a  man  by 
cutting  his  wages  to  so  low  a  point  that  the  man  would  quit  of 
his  own  accord,  the  cutting  of  a  competent  workman's  pay  be- 
low the  "going"  wage  for  the  time  and  place  should  be  construed 
as  dismissal.  Likewise  when  an  employee  without  fault  is  re- 
duced to  a  lower  position  in  the  works  or  is  shifted  perma- 
nently to  harder  or  more  onerous  work  the  workman  should 
have  the  option  of  staying  on  or  claiming  dismissal  pay  and 
leaving. 

What  of  "lay  off"  when,  on  account  of  slack  business,  the 
men  dismissed  are  not  replaced?  Instead  of  dismissing  men, 
let  the  employer  cut  down  hours  uniformly  in  the  shop  and  ndt 
until  he  cuts  them  below  half  time  shall  the  men  have  the  option 
of  staying  or  of  taking  their  dismissal  wage  and  leaving.  When 
a  man  is  laid  off  because  there  is  not  enough  work  to  keep  him 
busy  but  the  job  is  supposed  to  be  held  open  to  him,  let  the  dis- 
missal wage  payment  be  strung  out  thru  six  weeks.  If  the  em- 
ployer has  him  back  sooner  he  saves  himself  something. 

A  hoard  to  decide  all  such  questions  should  be  created  in 
each  industrial  communit3^  One  member  should  represent  em- 
ployees, another  employers  and  the  third  should  be  named  by 
the  State  Industrial  Commission. 

How  would  the  legal   dismissal   wage   affect   employers? 

The  obligation  to  pay  a  dismissal  wage  v/ould  give  such 
employers  a  motive  to  make  their  practice  conform  to  that  of 
those  thoughtful  and  humane  employers  who  have  brought  their 
annual  turnover  in  some  cases  down  to  30  per  cent  with  profit 
to  themselves  and  contentment  to  their  employees.    They  would 


PROBLEMS   OF   LABOR  175 

find  it  paid  to  give  attention  to  human  engineering,  to  install 
employment  managers  who  investigate  why  an  employee  is  doing 
badly  and  find  a  way  to  remove  the  cause.  Before  letting  a 
man  go  with  a  fortnight's  free  wages  they  would  try  him  out 
in  different  positions  or  departments  in  the  hope  of  finding  the 
right  place  for  him,  or  would  even  provide  him  with  the  instruc- 
tion which  would  enable  him  to  make  good  on  the  job.  In  time 
of  slack  business  they  would  put  their  men  on  part  time  rather 
than  turn  some  of  them  off. 

Just  as  the  burden  of  accident  compensation  sinks  to  the  min- 
imum in  the  case  of  the  employer  who  takes  the  most  pains  and 
goes  to  the  most  expense  to  eliminate  accidents  from  his  mill, 
so  the  burden  of  a  legal  dismissal  wage  will  be  least  on  the 
employer  who  picks  his  men  most  carefully,  tries  them  out  most 
speedily  and  gives  the  most  care  to  building  up  a  permanent 
labor  force.  By  providing  the  worker  with  an  added  induce- 
ment to  keep  a  good  job  and  the  employer  with  an  added  in- 
ducement to  keep  a  good  man,  it  would  tend  to  stabilize  Amer- 
ican industrj'^  and  favor  the  survival  of  the  types  of  employer 
and  worker  society  ought  most  to  encourage. 


UNEMPLOYMENT  AND  HEALTH  INSURANCE' 

Unemployment  is  the  only  purely  industrial  hazard.  It  is 
far  and  away  the  most  disastrously  costly  of  all  hazards.  It  is 
the  one  about  which  we  know  least  and  in  regard  to  which  we 
have  done  almost  nothing.  The  people  of  the  United  States 
have  given  almost  no  attention  to  the  business  of  directing 
workmen  to  employment.  We  have  done  nothing  at  all  to  fur- 
nish employment  to  the  unemployed  in  dull  times  on  public 
works,  highAvays,  harbor  improvements,  public  buildings,  and 
other  construction  work  for  the  community.  Yet  such  work 
has  to  be  done,  and  it  is  perfectly  practicable  to  arrange  to 
have  these  works  constructed  during  dull  seasons  and  in  times 
of  depression,  so  as  to  relieve  the  stress  of  slack  work  and 
unemployment  in  such  periods.  The  policy  of  pushing  public 
construction  work  during  the  dull  season  and  in  times  of  de- 
pression is  no  new  proposition.    The  experiment  has  been  tried 

1  From  an  address  by  Royal  Meeker,  U.  S.  Commissioner  of  Labor 
Statistics.  Prepared  for  the  convention  of  the  Association  of  Govern- 
mental Labor  Officials  of  the  United  States  and  Canada,  Madison,  Wis 
June    2-4,    1919. 


1 76  SELECTED   ARTICLES 

abroad  and  has  worked  successfully.  In  this  country,  however, 
when  unemployed  workmen  have  clamored  for  work,  we  have 
pointed  out  to  them  our  stupendous  resources,  our  marvelous 
economic  genius,  the  majestic  magnitude  of  our  industries,  and 
the  tremendous  velocity  of  our  progress,  and  we  have  said,  "No 
man  who  really  wants  work  need  be  idle."  Long  sophomoric 
essays  have  been  written  to  prove  that  the  only  idle  people  in 
our  unprecedcntedly  prosperou:  country  arc  those  who  will  not 
work.  How  otherwise  could  be  explained  the  numbers  of  idle 
men  and  women  in  the  midst  of  our  plenteous  prosperity?  In 
recent  years  we  have  begun  to  distrust  this  simple  explanation 
of  unemployment.  Tlie  laboring  men  and  women  of  the  country 
are  insisting  loudly  upon  their  right  to  work  and  earn  food, 
raiment,  and  shelter  for  their  bodies,  as  a  substitute  for  the 
privilege  of  receiving  these  indispensable  goods  as  uncertain 
doles  bestowed  by  the  hands  of  professional  philanthropists  in 
the  name  of  organized  charity.  Who  can  blame  the  workers 
for  preferring  wages  above  alms? 

Our  legislatures  have  been  very  slow  to  recognize  the  exist- 
ence of  unemployment  in  our  country.  When  they  have  recog- 
nized it,  they  have  made  no  attempt  to  measure  its  magnitude 
or  deal  with  it  intelligently  or  effectively.  Our  efforts  to  deal 
with  unemployment  are  still  mainly  confined  to  handing  out 
bread  and  soup  indiscriminately  to  all  comers.  The  Romans  dis- 
pensed bread  and  circuses  to  their  unemployed.  We  have  sub- 
stituted soup  for  circuses.  That  has  been  thus  far  our  contri- 
bution toward  the  ultimate  solution  of  the  problem  of  unem- 
ployment. Whether  we  have  improved  upon  the  Roman  form- 
ula for  the  treatment  of  the  unemployed  may  be  determined  only 
by  a  careful  statistical  study  of  the  relative  merits  of  the  Roman 
circus  and  of  the  American  soup  dispensed  to  the  unemployed. 

Some  of  the  States  and  the  Federal  Government  have  set 
up  systems  of  employment  offices  to  bring  together  the  "jobless 
man"  and  the  "manless  job."  It  has  often  been  asserted  that 
these  offices  can  not  create  work  for  the  unemployed.  Their 
work,  however,  has  exactly  the  same  effect  if  they  bring  an  un- 
employed man  into  a  job  that  would  have  remained  unoccupied 
without  their  efforts.  A  public  employment  office,  even  a  very 
inefficient  one,  is  a  recognition  on  the  part  of  the  public  of  a 
solemn,  tragic  fact  and  of  great  fundamental  principle— the  fact 
of  unemployment  and  the  principle  of  public  responsibility 
therefor.     These  public   offices   should   be  vigorously   supported 


PROBLEMS    OF   LABOR  I77 

by  the  people  until  they  have  driven  all  competing,  profiteering 
private  emplo>Tnent  offices  out  of  existence. 

The  unemployed  who  want  work  should  be  given  the  op- 
portunity to  do  productive  work  through  public  employment 
offices ;  the  unemployed  who  want  to  live  and  loaf  at  the  expense 
of  the  industrious  should  be  made  to  work  on  farm  colonies  and 
in  penal  institutions.  The  trouble  with  our  public  employment 
officers  is  the  trouble  which  afflicts  many  if  not  most  of  our  in- 
stitutions. We  have  recognized  the  principle  and  defaulted  in 
the  interest.  Our  people  are  not  willing  to  give  of  their  time 
and  effort  to  bring  and  keep  the  offices  up  to  a  high  standard  of 
efficiency. 

The  United  States  has  no  hereditary  governing  classes;  the 
business  of  government  falls  upon  the  masses.  Class  govern- 
ment, of  the  classes,  by  the  classes,  and  for  the  classes  is  rela- 
tively simple  and  easy  to  effect.  There  is  nothing  more  difficult 
than  to  bring  to  pass  mass  government,  of  the  people,  by  the 
people,  and  for  the  people.  The  American  people  are  an  in- 
genious and  an  ingenuous  people.  We  have  done  more  to  sub- 
stitute automatic  machinery  and  devices  for  men  and  brains  than 
any  other  people  on  earth.  Whenever  we  see  a  man  working 
at  a  steady  job  we  want  to  devise  a  machine  to  take  his  pl.ice. 
We  yearn  for  perpetual  motion,  social,  political,  economic,  re- 
ligious, spiritual,  and  physical.  We  want  devices  which,  when 
once  set  going,  will  go  on  forever,  requiring  no  further  atten- 
tion or  intelligent  effort  on  our  part.  We  elect  legislatures 
which  enact  statutes  making  it  unlawful  to  do  wrong,  and  we 
go  on  our  way  rejoicing.  When  the  wrongdoers  continue  to  do 
wrong,  we  set  up  a  board  or  commission  to  put  a  stop  to  the 
wrongdoing.  When  the  board  or  commission  fails  to  work,  we 
set  up  another  automatic  device  to  make  it  work,  and  so  on. 

But  even  if  we  had  a  complete  and  smoothly  working  na- 
tional system  of  employment  offices  we  would  not  have  solved 
the  problem  of  unemployment.  Periodical,  seasonal,  and  even 
weekly  and  diurnal  irregularities  in  employment  would  exist. 
It  is  immensely  more  important  that  we  smooth  out  the  irregu- 
larities in  employment  than  that  we  establish  employment  offices. 
Prevention  is  worth  a  thousand  tons  of  cure.  At  first  blush 
it  might  seem  that  every  industry  should  be  self-supporting, 
that  is,  every  industry  should  pay  at  least  a  living  annual  wage — 
a  wage  sufficient  to  keep  a  worker  and  his  family  throughout 
the  year,  even  though  the  industry  should  run  for  only  a  few 


:jS  SELECTED   ARTICLES 

months  in  the  year.  This  idea  sounds  attractive  but  it  is  im- 
practicable. If  we  try  to  put  it  into  effect  the  canning  indus- 
tries would  be  destroyed  along  with  many  other  useful  indus- 
tries which  operate  for  only  a  part  of  the  year.  It  is,  however, 
perfectly  practicable  to  combine  seasonal  industries  and  indus- 
tries having  considerable  irregularity  in  employment  so  as  to 
make  employment  much  more  stable  than  at  present.  But  even 
when  employment  is  stabilized  as  far  as  possible,  there  will  still 
exist  recurrent  unemployment. 

Unemployment  Insurance 

How  much  unemployment  there  is  to-daj^  nobody  can  say. 
What  may  be  called  "the  irreducible  minimum"  of  unemploy- 
ment can  not  even  be  guessed  at.  No  complete  and  accurate 
survey  of  the  amount  and  significance  of  unemployment  in  this 
country  has  ever  been  made,  and  no  funds  have  ever  been  ap- 
propriated by  Congress  to  enable  such  a  study  to  be  undertaken 
although  the  importance  of  current  information  on  this  subject 
can  scarcely  be  overemphasized.  We  shall  never  know  the  ex- 
tent of  unemployment  until  we  have  unemployment  insurance. 
Heretofore  I  have  opposed  unemployment  insurance  on  the 
ground  that  we  have  no  adequate  machinery  to  carry  such  in- 
surance into  effect.  It  seemed  to  me  necessary  that  a  very  com- 
plete system  of  employment  offices  should  be  established  before 
we  ventured  to  enact  unemployment  insurance  legislation.  I 
have  been  driven  to  the  conclusion,  however,  that  unemploy- 
ment insurance  is  absolutely  necessary  if  for  no  other  purpose 
than  to  secure  a  complete  registration  of  all  unemployed  per- 
sons throughout  the  country.  When  we  think  of  the  disastrous 
consequences  to  the  worker  and  to  society  resulting  from  unem- 
ployment, the  millions  of  dollars  necessary  to  carry  into  efTect 
an  unemployment  insurance  law  seem  a  small  price  to  pay  for 
the  information  requisite  for  us  to  deal  with  this  great  evil. 

The  Department  of  Labor  Statistics  in  Great  Britain  knows 
each  week  the  number  of  unemployed  in  each  industry  through- 
out Great  Britain  and  Ireland.  This  information  is  invaluable 
to  the  British  Government  in  dealing  with  the  tremendous 
problems  of  reconstruction  and  the  reemployment  of  demobil- 
ized soldiers,  sailors,  and  civilians.  Had  we  been  as  deeply 
engaged  in  the  war  as  Great  Britain,  our  country  to-day  would 
be  overwhelmed  with  disaster  because  of  our  inability  to  direct 
our  industrial  energies  so  as  to  absorb  the  enormous  masses  of 


PROBLEMS    OF   LABOR  I79 

workers  coming  in  part  from  our  disbanding  Army,  but  in  the 
main,  of  course,  from  specialized  munition  factories.  Even  as 
it  is,  unemployment  has  reached  very  serious  proportions  in 
different  sections  of  our  country,  and  it  will  undoubtedly  grow 
worse  before  it  grows  better.  In  the  meantime,  we  know 
nothing  quantitatively  about  unetnployment.  All  we  know  is 
that  it  is  serious  in  extent  and  unforetellable  in  its  possible 
results. 

I  do  not  want  to  see  an  unemployment  insurance  law, 
modeled  after  the  British  act,  enacted  in  this  country.  It  is 
very  clear  to  me  that  industry  should  be  made  as  nearly  self- 
supporting  as  possible.  Unemplojment  is  the  one  hazard  that 
is  purely  industrial,  and  it  causes  more  distress  and  social  de- 
moralization than  any  other  hazard  affecting  the  life  and  health 
of  the  workers.  Yet  nothing  has  been  done  about  it  by  indus- 
trj^  and  next  to  nothing  by  society.  The  whole  burden  falls 
upon  the  individual  worker  except  for  the  feeble,  sporadic  help 
given  by  a  few  trade-unions.  Industry  should  be  made  to  pay 
the  costs  of  production.  A  part  of  the  costs  of  production 
under  the  present  organization  of  industry  is  unemployment 
tempered  by  underemployment  and  overemployment.  It  would 
be  very  simple  to  put  the  money  costs  of  unemployment  upon 
industries  on  an  insurance  plan.  The  premium  rate  would  be 
lowest  for  the  most  stable  industries  and  highest  for  those  in 
which  employment  is  regularly  irregular. 

The  cost  of  organizing  and  conducting  unemployment  in- 
surance must  be  put  upon  industries  approximately  in  propor- 
tion to  the  extent  of  unemployment  in  each  industry.  For  ex- 
ample, seasonal  industries  like  tomato  canning,  fish  canning,  and 
the  like,  should  pay  a  greater  proportional  part  of  the  tax  or 
premium  for  unemployment  benefits  than  industries  working 
the  year  round.  In  addition  to  imemployment  insurance  taxes 
or  premiums,  industry  should  be  required  to  pay  a  "dismissal 
wage"  to  employees  discharged  for  no  fault  of  their  own.  It 
will  require  much  careful  thought  and  expert  draftsmanship 
to  shape  up  a  measure  that  will  hold  water,  but  every  thing 
that  is  worth  doing  at  all  is  difficult. 

I  do  not  expect  unemployment  insurance  legislation  to  be 
enacted  immediately,  but  it  is  bound  to  come.  It  is  remarkable 
that  industries  have  not  been  held  accountable  or  even  con- 
nected with  the  only  purely  industrial  hazard  that  we  have.  The 
attention  of  employers  must  be  directed  to  the  dangerous  and 


i8o  SELECTED    Al^TICLES 

demoralizing  effects  of  unemployment  and  the  responsibility  of 
industry  therefor.  When  employers  realize  the  dangers  in- 
volved and  their  responsibilities  we  may  trust  to  their  patriotism 
and  fair-mindedness  to  apply  the  proper  remedy. 


A  PERMANENT  PROGRAM  FOR  STABILIZING 
EMPLOYMENT   IN   NEW  YORK  STATE  ^ 

The  New  York  State  Reconstruction  Commission,  under  the 
chairmanship  of  Abram  I.  Elkus,  submitted  on  June  17,  1919, 
a  report  to  the  Governor,  suggesting  the  desirability  of  framing 
a  permanent  program  for  dealing  with  the  problem  of  unem- 
ployment in  the  State,  and  making  certain  well-defined  recom- 
mendations for  developing  and  putting  into  efifect  such  program. 
The  commission  found  that  "the  chronic  unemployment  which 
exists  in  the  State"  independent  of  business  conditions  is 
attributable  in  the  main  to  two  factors  (i)  the  physical  impos- 
sibility, in  the  present  industrial  organization,  of  connecting 
workers  with  jobs  without  loss  of  time  in  the  interim,  and  (2) 
the  seasonal  fluctuations  in  the  demand  for  labor  in  the  several 
industries.  It  was  also  found  that  in  addition  to  these  con- 
tinuous and  normal  causes  of  unemployment  there  are  varia- 
tions in  the  demand  for  labor  in  one  or  another  industry  due 
to  the  incessant  play  of  business  conditions  and  to  cyclical  de- 
pressions of  the  whole  industrial  system,  caused  by  fluctuations 
in  gold  and  silver,  misdirection  of  productive  energy,  under- 
consumption, excessive  competition,  etc. 

While  not  condemning  the  private  employment  exchanges, 
which  the  commission  admits  have  a  mission  to  perform,  as 
for  instance  in  the  case  of  schools,  colleges,  and  business  col- 
leges which  conduct  employment  bureaus  for  the  benefit  of  their 
graduates,  it  is  felt  that  for  the  great  majority  of  employments 
the  ideal  condition  will  be  attained  only  when  the  State  system 
of  exchanges  becomes  in  effect  the  exclusive  source  of  supply 
of  labor.  To  this  end  it  is  believed  the  permanent  legislative 
policy  of  the  State  should  be  carefully  directed.  The  great 
problem  to  be  worked  out  is  to  reduce  to  a  minimum  the  loss 
of  time  which  now  results  in  connecting  the  worker  and  the 
job  and  this  may  be  accomplished  by  establishing  a  system  of 

1  Monthly  Labor  Review.  U.  S.  Bureau  of  Labor  Statistics.  9:245-8. 
November,    19 19. 


PROBLEMS    OF   LABOR  i8i 

labor  exchanges  which  would  record  in  a  single  unified  register 
every  vacancy  and  every  seeker  for  work.  The  commission  feels 
that  it  is  impossible  to  secure  "even  an  approach  to  this  condi- 
tion under  the  system  of  competitive  privately  operated,  fee- 
charging  employment  agencies"  and  that  it  must  be  done  by  a 
system  of  public  employment  offices  established  on  an  adequate 
basis.  More  vigorous  supervision  of  private  agencies  is  sug- 
gested; they  should  be  licensed  regardless  of  locality  "and 
should  be  required  to  sign  a  penal  bond,  the  license  to  be  for  a 
short  period  of  time  and  to  embody  provision  for  the  revoca- 
tion or  nonrenewal  of  the  license  in  the  event  of  improper  con- 
duct on  the  part  of  the  licensee." 

In  connection  with  the  development  of  a  State  employment 
system  and  the  control  and  gradual  supplanting  of  most  of  the 
private  employment  agencies,  a ,  condition  which  the  commis- 
sion believes  would  be  brought  about  by  the  competition  of  the 
free  public  agencies,  there  are  a  number  of  problems  suggested 
as  needing  careful  study  by  the  State  industrial  commission, 
with  a  view  to  working  out  a  definite  program.    These  are — 

1.  The  organization  of  the  labor  market  to  bring  about  extensive 
dovetailing  of  winter  and  summer  trades  and  to  stimulate  the  use  of 
subsidiary    trades. 

2.  Directing  labor  to  new  occupations  when  changes  of  industrial 
structure   result   in    displacement   from   chosen   occupations. 

3.  Reserving  certain  places  in  industry  for  older  men  and  women 
and  leaving  the  younger  generation  the  task  of  finding  and  forcing  fresh 
openings    for    themselves. 

4.  Concentrating  attention  upon  the  need  for  industrial  training,  in- 
cluding "vestibule"  or  preliminary  training,  training  in  plants  to  in- 
crease efficiency  while  gainfully  employed,  and  training  in  trade  and 
business  schools.  This  should  be  done  with  the  State  and  local  depart- 
ments of  education  and  with  private  educational  institutions.  An  annual 
bulletin  should  be  published,  similar  to  that  published  by  the  Clearing 
House  for  War  Time  Training  for  Women,  describing  the  courses  of 
training  in  schools,  trade  schools,  colleges,  etc.,  for  those  seeking  a  vo- 
cational   education. 

5.  Directing  boys  and  girls  away  from  "blind  alley"  employment 
and  issuing  monthly  bulletins  based  on  the  most  complete  figures  which 
can   be   obtained. 

6.  Testing  periodically  and  comprehensively  the  amount  of  unemploy- 
ment. 

7.  In  cases  of  seasonal  employment  or  depression,  urging  employers 
to  shorten  hours  rather  than  discharge  employees. 

The  commission  points  out  in  some  detail  the  difficult  and 
somewhat  unsatisfactory  result  which  would  appear  to  follow 
the  adoption  of  a  definite  plan  for  State  control  of  public  works 
construction  by  which  projects  contemplated  by  the  State  or  by 
municipalities  might  be  so  handled  as  to  furnish  employment  to 
the  largest  possible  number  in  times  of  industrial  depression.  It 
is  at  best  a  new  and  untried  method  of  public  works  administra- 


iS2  SELECTED   ARTICLES 

tion  and  finance,  and  the  commission  states  that  it  has  not  feh 
justified  in  recommending  its  adoption  as  a  means  of  ameliorat- 
ing the  severity  of  unemployment  conditions. 

For  the  present  it  would  seem  that  the  most  that  can  practically  be 
done  is  to  impress  upon  the  various  State  departments  and  the  local 
authorities  the  desirability  of  planning  public  improvements  upon  a  long- 
term  basis,  and  to  designate  some  authority  in  the  State  to  keep  currently 
in  touch  with  the  execution  of  the  several  local  and  State  programs, 
with  a  view  to  urging  upon  the  city,  county,  and  State  authorities,  and 
where  necessary,  upon  the  State  legislature,  prompt  action  in  pushing 
forward  the  work  outlined  with  especial  vigor  whenever  industrial  de- 
pression threatens. 

Along  this  line  the  commission  recommends  that— 

(i)  In  the  absence  of  a  single  recognized  Slate  public  works  di- 
rector the  legislature  authorize  and  require  the  State  industrial  com- 
mission through  the  bureau  of  employment  to  obtain  during  the  first  three 
months  of  each  year  from  the  several  State  departments  and  localities  in- 
formation regarding  all  public  works  projected  and  under  construction, 
and  to  publish  this  information  annually  in  April  in  a  summary  form 
similar  to  that  adopted  this  year  by  the  reconstruction  commission  in 
its  report  to  you  on  public  improvements.  (2)  An  informal  body  be  set 
up  consisting  of  representatives  of  the  State  departments  principally  con- 
cerned with  public  works  including  the  State  engineer,  superintendent  of 
public  works,  commissioner  of  highways.  State  architect  and  conserva- 
tion commissioner,  and  of  representatives  of  the  State  industrial  com- 
mission, which  shall  study  the  data  thus  obtained  in  conjunction  with  the 
data  regarding  employment  and  business  conditions  currently  gathered  by 
the  State  industrial  commission  and  shall  call  in  April  or  Alay  an  annual 
conference  of  all  public  works  authorities  throughout  the  State  to  discuss 
engineering,  financial,  employment,  and  other  common  problems  and  to 
endeavor  by  counsel  and  suggestion  to  effect  the  vigorous  prosecution  of 
all  works  already  planned  for  and  financed,  and  the  prompt  financing  of 
works  projected  whenever  severe  business  depression  and  unemployment 
threaten.  At  this  conference  arrangements  should  be  made  by  the  rep- 
resentatives of  the  bureau  of  employment  with  the  various  public  works 
authorities  whereby  the  bureau  could  be  instrumental  in  supplying  men  to 
officials  and  contractors  when  work  actually  commences.  Were  such  a 
board  instituted,  its  operations  over  a  period  of  a  few  years  would  dis- 
close, more  ellectively  than  any  speculatuju  which  may  now  be  advanced 
by  your  commission,  precisely  what  if  anything  may  be  accomplished  by 
more  positive  and  compulsory  action  of  the  State  in  securing  an  actual 
deferment   of   public   works   construction  against   periods   of   depression. 

Even  if  such  a  plan  were  adopted  and  put  into  effect  a  cer- 
tain amount  of  unemployment  would  still  persist.  Unemploy- 
ment insurance  has  been  suggested  to  remedy  this  situation, 
but  the  commission  hesitates  to  recommend  such  a  plan  for 
New  York  State,  at  least  until  the  State  employment  service  is 
greatly  extended  to  a  point  where  it  becomes  practically  a 
monopoly  and  is  so  efficient  as  to  be  capable  of  administering 
a  law  which  involves  complete  supervision  of  all  employment 
throughout  the  State. 

Summary  of  Recommendations 

The  definite  recommendations  submitted  to  the  governor  by 
the  commission  on  reconstruction  are  thus  summarized  in  the 
report : 


PROBLEMS    OF   LABOR  183 

1.  Continue  to  develop  the  State  employment  service  look- 
ing toward  an  ultimate  State  monopoly  in  this  field,  excepting 
possibly  a  small  number  of  union  agencies  and  private  agencies 
supplj'ing  service  of  a  personal  and  professional  character. 

2.  Revise  and  introduce  the  bill  drawn  up  by  the  industrial 
commission  providing  for  licensing  at  a  fee  of  $250  of  all  pri- 
vate employment  agencies.  The  State  industrial  commission 
should  Hcense  all  agencies  excepting  those  in  first  class  cities. 
In  such  cities  the  licensing  should  be  done  locally,  but  the  State 
should  divide  all  fees  equally  with  the  cities.  The  State's  fees 
should  go  into  a  fund  for  support  of  the  bureau  of  employment. 

3.  Enforce  the  present  State  law  providing  for  the  main- 
tenance of  standard  registers  and  the  submission  of  figures  by 
private  employment  agencies,  extend  the  supervision  of  private 
employment  agencies,  and  draw  up  legislation  opening  the  books 
of  private  exchanges  to  audit  by  the  State  bureau  of  employ- 
ment. 

4.  Direct  the  industrial  commissioner,  through  the  bureau 
of  employment,  to  develop  a  program  which  should  cover  the 
following  subjects: 

(a)  The  organization  of  the  labor  market  to  bring  about 
extensive  dovetailing  of  winter  and  summer  trades  and  to  stimu- 
late the  use  of  subsidiary  trades. 

(b)  Directing  labor  to  new  occupations  when  changes  of 
industrial  structure  result  in  displacement  from  chosen  occupa- 
tions. 

(c)  Reserving  certain  places  in  industry  for  the  older  men 
and  women,  and  leaving  the  younger  generation  the  task  of  find- 
ing and  forcing  fresh  openings  for  themselves. 

(d)  Concentrating  attention  upon  the  need  for  industrial 
training,  including  "vestibule"  training  where  such  training 
does  not  lead  to  blind-alley  employment,  training  in  plants  to 
increase  efficiency  while  gainfully  em.ployed,  and  training  In  trade 
and  business  schools.  Issue  in  cooperation  with  the  State  and 
city  departments  of  education  annual  bulletins  outlining  the 
courses  of  training  in  schools  for  all  schools,  colleges,  etc.,  open 
to  persons  seeking  vocational  education. 

(e)  Directing  boys  and  girls  away  from  "blind-alley"  em- 
ployment. 

(/)  Testing  periodically  and  comprehensively  the  amount 
of  unemployment  and  publishing  bulletins  based  on  the  most 
complete  figures  which  can  be  obtained. 


i84  SELECTED   ARTICLES 

((/)  In  cases  of  seasonal  employment  or  depression,  urging 
employers  to  shorten  hours  rather  than  discharge  employees. 

5.  Authorize  and  require  the  State  industrial  commission 
through  the  bureau  of  employment  to  obtain  during  the  first 
three  months  of  each  year  from  the  several  State  departments 
and  localities  current  information  regarding  all  public  works 
projected  and  under  construction  and  to  publish  this  informa- 
ton  annually  in  April  in  summary  form. 

6.  Appoint  an  informal  committee  composed  of  represen- 
tatives of  the  State  departments  principally  concerned  with  pub- 
lic improvements  and  of  the  State  industrial  commission  to  study 
data  thus  obtained  in  conjunction  with  data  regarding  employ- 
ment and  business  conditions  currently  gathered  by  the  State  in- 
dustrial commission,  and  to  call  in  April  or  May  an  annual 
conference  of  all  public  works  authorities  throughout  the  State 
to  discuss  engineering,  financial,  employment,  and  other  com- 
mon problems.  This  committee  should  vigorously  prosecute 
all  public  improvements  whenever  business  depression  and  un- 
employment threaten,  and  report  upon  the  need,  if  any,  of  com- 
pulsory action  to  secure  the  deferment  of  public  works  and  the 
establishment  of  public  works  reserves. 


TRADE  UNIONISM 

PROPORTION  OF  THE  ORGANIZED' 

What  is  the  Percentage  of  the  Organized  Workers  in  the  Organ- 
icable  Occupations  of  the  United  States? 

The  latest  census  gives  the  number  of  persons  "in  gainful 
occupations"    as : 

Males 30,000,000 

Females    8,000,000 

Total    38,000,000 

This  total  was  thus  classified : 

Pet. 

Agriculture    12,650,000         33.2 

Domestic  and  General   Service    3,770,000  9,9 

Professional   Service    1,700,000  4.4 

Public    Service    460,000  1.2 

Clerical    Service    1,700,000  4.6 

Trade    3,600,000  9.5 

Total   23,900,000         62.S 

Extracting  Minerals    965,000 

Manufacturing  and  Mechanical  Work.  10,658,000 
Transportation 2,637,000 

Total   14,100,000         37.2 

Grand   Total    38,000,000       100 

In  no  country  are  workers  of  the  first  group  (23,900,000)  or- 
ganized to  anj-  extent  In  trade  unions. 

In  the  second  group  (14,100,000)  besides  wage  workers  there 
are  employers  big  and  little,  the  higher  salaried  employees,  young 
persons  learning  trades,  unskilled,  unassimilated  foreigners, 
craftsmen  in  small  industries  or  in  non-industrial  communities 
and   numerous    persons    self-employed.      Only    estimates   can    be 

^  From  the  Amalgamated  Journal. — Iron,  Steel  and  Tin  Workers, 
Pittsburgh,    Pa.      November,    19 19. 


i86  SELECTED   ARTICLES 

formed  for  the  numbers  in  these  classifications,  which  either 
have  interests  apart  from  those  of  the  wage  workers  or  in  all 
countries  are  unorganizable. 

Number  of  organizable  men  and  women  in  industry  in  this 
country  is  8,000,000.  The  American  Federation  of  Labor  and 
the  railroad  brotherhoods  now  count  up  4,500,000.  This  would 
give  55  per  cent,  of  the  total  8,000,000  organizable  organized. 
But  if  we  have  7,000,000  instead  of  8,000,000,  the  percentage  of 
the  organized  becomes  63  (4,500,000  out  of  7,000,000)  ;  and  if 
6,000,000,  the  percentage  is  75  (4,500,000  out  of  6,000,000). 

But,  come  to  the  practical  question.  In  any  particular  indus- 
trial contest  between  buyers  and  sellers  of  labor  power  the  pro- 
portion of  the  organized  to  the  unorganized  in  all  the  extent  of 
America  has  little  bearing.  The  outcome  of  any  such  struggle 
depends  upon  the  number  of  the  unorganized  and  unemployed 
who  are  qualified  to  work  at  the  occupations  affected  and  reach- 
able within  a  practicable  hiring  area  and  willing  to  undermine 
union  conditions.  It  is  to  be  kept  in  mind  that  in  every  com- 
munity masses  of  the  unorganized  are  union  sj-mpathizers, 
showing  themselves  within  the  sphere  of  union  influence  when- 
ever there  is  a  strike.  Statistics  fail  to  enumerate  these  potential 
unionists. 

The  wage  conflict  being  most  active  in  industrial  centers,  the 
workers  in  them  are  in  general  thoroughly  organized.  The  more 
highly  skilled  trades  in  many  American  communities  have  an 
effectiveness  in  unionized  labor  of  100  per  cent. 

In  the  light  of  the  foregoing  analysis  of  the  census  statistics 
the  American  trade  unionists  can  certainly  claim  for  industry  50 
per  cent,  organized  as  it  is  to  be  kept  in  mind,  too,  that  in  the 
A.  F.  of  L.  statistics  there  are  included  neither  the  independent 
unions  nor  the  I.  VV.  W. 

Under-rating  the  numerical  strength  of  the  American  trade 
union  movement  is  frequently  accompanied  by  an  over-rating  of 
the  British  movement.  A  member  of  an  American  employers' 
commission  was  recently  quoted  in  the  London  Times  as  saying: 
"While  your  workers  are  85  per  cent,  organized  in  unions,  the 
trade  unions  of  the  United  States  have  only  about  10  per  cent, 
so  organized,"  and  the  impression  that  the  proportion  given  to 
Britain  is  a  fact  seems  to  prevail  generally. 

But  the  statistics  for  Britain  do  not  show  85  per  cent,  of  "the 
workers"  organized.  Far  from  it.  Mr.  H.  G.  Williams,  in  a 
carefully  prepared  paper  read  at  the  annual  convention  of    the 


PROBLEMS    OF    LABOR  187 

British  Industrial  League  in  August  last,  estimated  that  in  1906 
there  were  in  the  Kingdom  19,420,000  "occupied  persons,"  of 
whom  1,000,000  were  income  tax  payers,  the  remaining  18,420,000 
having  incomes  under  £  160  ($800)  a  year.  For  the  latter  the 
groupings  were : 

Agriculture    1,690,000 

Domestic    service    2,050,000 

Commercial,    professional    2,240,000 

Persons  working  for  themselves    3,920,000 

Manufacturing    trades     6,410,000 

Railways    610,000 

Mines  and  quarries    1,000,000 

Casual   labor   500,000 


18,420,000 

The  four  classifications  last  named  in  the  table  number  8,520,- 
000.  If,  as  reported  at  the  Derby  Trade  Union  Congress  in  191 8, 
the  number  of  British  trade  unionists  was  4,500,000,  and  the 
foregoing  table  as  a  whole  warrants  an  estimate  of  about  9,000,- 
000  persons  organizable,  the  proportion  organized  in  Great 
Britain  is  somewhere  about  50  per  cent. 


THE  EMPLOYER'S  VIEWPOINT' 

Representing  as  we  do  on  this  Commission,  the  employers' 
side,  we  are  at  one  with  the  other  members  of  our  Federal 
Commission  who  represent  the  general  public,  and  also  with 
those  representing  organized  labor,  in  believing  that  under  mod- 
ern industrial  conditions,  collective  bargaining,  when  fairly  and 
properly  conducted,  is  conducive  to  the  best  good  of  the  em- 
ployer, the  worker,  and  society.  We  find  that  there  are  many 
enlightened  emploA-ers  who  concur  in  this  view,  who  in  the  past 
recognized  and  dealt  with  organized  labor,  but  who  now  refuse 
to  do  so,  and  who,  under  proper  conditions,  would  willingly  con- 
tinue to  engage  in  collective  bargaining.  With  good  cause,  in 
our  opinion,  however,  they  place  the  responsibility  for  their  re- 
fusing to  do  so  at  the  door  of  organized  labor.  There  is  an 
abundance  of   available  testimony  in   our  records  to  show  that 

1  From  report  of  Harris  Weinstock,  S.  Thurston  Ballard,  Richard  H. 
Aishton,   members   of   U.S.    Commission    on    Industrial    Relations,    igis- 


i88  SELECTED   ARTICLES 

many  employers  are  frightened  off  from  recognizing  or  dealing 
with  organized  labor  for  fear  that  to  do  so  means  to  put  their 
heads  in  the  noose  and  to  invite  the  probability  of  seriously  in- 
juring, if  not  ruining,  their  business. 

The  prime  objection  that  such  employers  have  to  recognizing 
and  dealing  with  organized  labor  is  the  fear  of — 

(a)      Sympathetic  strikes. 

(6)     Jurisdictional  disputes. 

(c)  Labor  union  politics. 

(d)  Contract  breaking. 

(e)  Restriction  of   output. 

(/)  Prohibition  of  the  use  of  nonunion  made  tools  and 
materials. 

(g)     Closed   shop. 

(h)     Contests  for  supremacy  between  rival  unions. 

(i)  Acts  of  violence  against  nonunion  workers  and  the 
properties  of  employers. 

(/)     Apprenticeship   rules. 

While  we  have  found  many  sinners  among  the  ranks  of  the 
employers,  the  result  of  our  investigation  and  inquiries  forces 
upon  us  the  fact  that  unionists  also  can  not  come  into  court 
with  clean  hands ;  that  this  is  not  a  case  where  the  saints  are 
all  on  one  side  and  the  sinners  all  on  the  other.  We  find  saints 
and  sinners,  many  of  them,  on  both  sides. 

The  hope  of  future  industrial  peace  must  lie  in  both  sides 
using  their  best  endeavors  to  minimize  the  causes  that  lead  to 
the  growth  of  siiis  and  sinners  on  each  side  of  the  question. 

Sympathetic  Strikes 

Taking  up  seriatim  the  objections  offered  by  many  employers 
to  recognizing  and  dealing  with  organized  labor,  we  come  first  to 
that  of  the  sympathetic  strike.  The  employer  contends,  and  we 
find  ourselves  in  sympathy  with  his  contention,  that  it  is  a  rank 
injustice  to  subject  him  to  a  strike  of  his  employees  who  have 
absolutely  no  grievances,  to  stop  work  because  some  other  group 
of  workers,  possibly  at  a  remote  point,  have  a  real  or  fancied 
';,'ricvance  against  their  own  employer,  especially  when  such 
stoppage  of  work  may  not  only  inflict  a  very  serious  loss,  but 
may  mean  ruin  to  the  enterprise  of  the  innocent  employer,  thus 
making  it,  in  violation  of  all  the  equities,  a  clear  case  of  punish- 
ing the  many  innocent  for  the  one  or  the  iew  who  may  be  guilty, 
who  were  party  to  the  original  dispute. 


PROBLEMS    OF    LABOR  189 

Jurisdictional  Disputes 

The  employer  further  points  out  that  not  only  is  his  business 
liable  to  be  ruined  by  the  sympathetic  strike,  but,  more  especially 
in  the  building  trades,  is  he  likely  to  become  an  innocent  victim 
of  jurisdictional  disputes  for  which  he  is  in  no  wise  responsible 
and  over  which  he  has  absolutely  no  control. 

Sidney  and  Beatrice  Webb  point  out  that — 

It  is  no  exaggeration  to  say  that  to  the  competition  between  overlap- 
ping unions  is  to  be  attributed  about  nine-tenths  of  the  ineffectiveness  of 
the  trade  union  world.^ 

Innumerable  instances  have  occurred  where  jurisdictional  strikes  have 
lasted  for  months  and  sometimes  for  years. - 

In  1910  the  secretary  of  the  bricklayers  said: 

Our  disputes  with  the  operative  plasterers'  union  during  the  past  year 
have  taken  thousarids  of  dollars  out  of  our  international  treasury  for  the 
purpose  of  protecting  our  interest.  The  loss  in  wages  to  our  members  has 
amounted  to  at  least  $300,000.  The  loss  to  our  employers  has  been  up  in 
the  thousands,  also.'' 

Sidney  and  Beatrice  Webb  again  point  out  that  in  the  indus- 
tries of  Tyneside,  within  a  space  of  35  months,  there  were  35 
weeks  in  which  one  or  the  other  of  the  four  most  important 
sections  of  workmen  in  the  staple  industry  of  the  district,  abso- 
lutely refused  to  work.  This  meant  compulsory  idleness  of  tens 
of  thousands  of  men,  the  selling  out  of  households,  and  the 
semistarvation  of  whole  families  totally  unconcerned  with  the 
disputes,  while  it  left  the  unions  in  a  state  of  weakness  from 
which  it  will  take  years  to  recover. 

That  wise  and  far-seeing  labor  leaders  keenly  appreciate  the 
great  wrongs  inflicted  not  only  upon  the  employers,  but  upon  the 
workers  themselves,  by  virtue  of  cessation  of  work  in  jurisdic- 
tional disputes,  is  emphasized  by  the  following  extracts  from 
the  report  of  Mr.  Samuel  Gornpers.  President  of  the  American 
Federation  of  Labor,  at  its  convention  in  1902: 

Beyond  doubt,  the  greatest  problem,  the  danger  which  above  all  others 
is  threatening  not  only  the  success  but  the  very  existence  of  the  American 
Federation  of  Labor,  is  the  question  of  jurisdiction.  Unless  our  affiliated 
national  and  international  unions  radically  and  soon  change  their  course, 
we  shall,  at  no  distant  date,  be  in  the  midst  of  an  internecine  contest  un- 
paralleled in  any  era  of  the  industrial  world,  aye,  not  even  when  workmen 
of  different  trades  were  arrayed  against  each  other  behind  barricades  over 
the  question  of  trade  against  trade.  They  naturally  regard  each  other 
with   hatred,   and   treat   each    other  as   mortal   enemies. 

There  is  scarcely  an  affiliated  organization  which  is  not  engaged  in  a 
dispute  with  another  organization  (and  in  some  cases,  with  several  organ- 
izations) upon  the  question  of  jurisdiction.  It  is  not  an  uncommon  occur- 
rence for   an   organization,   and   several   have   done   so   quite   recently,    to   so 

I — Industrial  Democracy,   vol.    i,  p.    121. 

3 — The  Bricklayer  mfid  Mason,  Frf).,   tgii,  p.    1.37. 


190  SELECTED   ARTICLES 

change  their  laws  and  claims  to  jurisdiction  as  to  cover  trades  never  con- 
templated by  the  organizers,  officers,  or  members;  never  comprehended  by 
their  titles,  trades  of  which  there  is  already  in  existence  a  national  union. 
And  this   without  a  word  of  advice,  counsel,  or  warning. 

I  submit  that  it  is  untenable  and  intolerable  for  an  organization  to 
attempt  to  ride  rough-shod  over  and  trample  under  foot  rights  and  juris- 
diction of  a  trade,  the  jurisdiction  of  which  is  already  covered  by  an  ex- 
isting organization.  This  contention  for  jurisdiction  has  grown  into  such 
proportions,  and  is  fought  with  such  an  intensity  as  to  arouse  many  bitter 
feuds  and  trade  wars.  In  many  instances  employers  fairly  inclined  for 
organized  labor  are  made  innocently  to  suffer  from  causes  entirely  beyond 
their  control. 

Labor   Union   Politics 

The  third  objection  of  employers  to  recognizing  and  dealing 
with  organized  labor  is  the  risk  they  run,  especially  in  the  build- 
ing trades,  where  power  to  declare  a  strike  is  concentrated  in 
the  hands  of  a  business  agent,  of  finding  themselves  at  the  mercy 
of  either  a  corrupt  business  agent  or  one  who,  for  the  sake  of 
union  politics,  is  endeavoring,  in  order  to  perpetuate  himself  in 
ofifice,  to  make  capital  at  the  expense  of  the  innocent  employer 
by  making  unwarranted  and  unreasonable  demands  against  the 
employer. 

Contract  Breaking 

The  fourth  reason  offered  by  the  employers  for  refusing  to 
recognize  or  to  deal  with  organized  labor,  is  its  increasing  un- 
reliability in  keeping  trade  agreements.  To  give  one  case  in 
point,  our  record  gives  the  story,  in  undisputed  statement  pub- 
lished in  the  United  Mine  Workers'  Journal,  which  is  the  official 
organ  of  the  United  Mine  Workers  of  America,  written  by 
Mr.  W.  O.  Smith,  ex-Chairman  of  the  Executive  Committee  of 
the  Kentucky'  District  of  United  Mine  Workers  of  America,  in 
which  Mr.  Sinith,  among  other  things,  says : 

Because  of  the  indifference  of  the  conservative  members  of  our  unions, 
and  the  activity  of  the  radical  element  which  is  responsible  for  the  greatest 
menace  which  has  ever  threatened  the  United  Mine  Workers  of  America, 
the  local  strike,  during  the  past  two  or  three  years  the  international,  as 
well  as  the  district  and  subdistrict  officials,  have  been  confronted  with 
many  perplexing  problems,  some  of  which  seem  to  threaten  the  very  life  of 
the  organization.  But  I  believe  I  am  safe  in  saying  that  no  problem  has 
given  them  so  much  concern  as  the  problem  of  local  strikes  in  violation 
of    agreements. 

Thousands  of  dollars  are  expended  every  year  in  an  effort  to  organize 
the  250,000  nonunion  miners  in  the  United  States,  while  hundreds  of  our 
members  go  on  strike  almost  every  day  in  absolute,  uncxcusable  violation 
of   existing   agreements. 1 

This   criticism   coines   not    from    an   employer,   but   from   an 
ardent,  earnest  unionist,  in  high  standing  in  his  organization. 
Corroborating  the  statement  of  Mr.  Smith,  comes  a  statement 

I — New  York  Hearings,  U.  S.  Commission  on  Industrial  Relation, 
pp.   2750-51- 


PROBLEMS   OF   LABOR  191 

published  in  Coal  Age  of  December  20,  1913,  issued  by  the  Asso- 
ciation of  Bituminous  Coal  Operators  of  Central  Pennsj'lvania, 
addressed  to  Mr.  Patrick  Gilday,  President  of  District  No.  2, 
U.  M.  W.  of  A.,  Morrisville  mines,  Pa.,  dated  Philadelphia,  De- 
cember 12,  1913,  in  which,  among  other  things,  the  following 
appears : 

Whereas,  Rules  12  and  13  of  said  agreement  provide,  "that  should  dif- 
ferences arise  between  the  operators  and  mine  workers  as  to  the  meaning 
of  the  provisions  of  this  agreement  or  about  matters  not  specifically  men- 
tioned in  this  agreement,  there  shall  be  no  suspension  of  work  on  account 
of  such  difference,  but  an  earnest  effort  be  made  to  settle  such  differences 
immediately."  Whereas,  notwithstanding  the  fact  that  Rule  15  provides 
the  right  to  hire  and  discharge,  the  management  of  the  mine  and  the  direc- 
tion of  the  working  forces  are  vested  exclusively  in  the  operator,  the 
United  Mine  Workers  of  America  have  absolutely  disregarded  this  rule,  in 
that  they  have  at  numerous  times  served  notices  on  substantially  every 
operator  belonging  to  our  Association,  that  unless  all  the  employees  work- 
ing for  such  operators  should  become  members  of  the  union  on  or  before 
certain  dates  mentioned  in  said  notices,  that  they,  the  Mine  Workers,  would 
close  or  shut  down  the  operators'  respective  mines,  and  in  many  instances 
did  close  the  mines  for  this  reason,  and  refused  to  return  to  work  imlcss 
such  nonunion  employees  were  discharged.  This  conduct  is  in  direct  viola- 
tion of  the  contract,  and  specifically  interferes  with  and  abridges  the  right 
of  the  operator  to  hire  and  discharge;  of  the  management  of  the  mine, 
and  of  the  direction  of  the  working  forces;  this  conduct  in  violation  of 
contract  on  the  part  of  the  Mine  Workers,  as  well  as  that  mentioned  in 
the  preceding  paragraph,  has  resulted  in  more  than  one  hundred  strikes 
during  the  life  of  our  scale  agreement.^ 

Numerous  other  illustrations  could  be  given  from  the  records 
of  the  Commission,  showing  that  there  are  other  instances  where 
unions  did  not  observe  their  contracts,  tending  to  make,  in  the 
minds  of  many  employers,  a  character  for  all  unionism,  and  thus 
increasing  their  hesitancy  in  recognizing  and  dealing  with  unions. 

Restriction  of  Output 

Not  least  among  the  reasons  given  by  fair-minded  employers 
for  refusing  to  recognize  or  deal  with  labor  unions,  is  the  fact 
that  many  unions  stand  for  a  limited  output,  thus  making  among 
their  workers  for  the  dead  level,  and  thereby  making  it  impossi- 
ble for  the  union  employer  successfully  to  compete  with  the 
nonunion  employer,   who   is   not   faced  with   such  handicap. 

British  industrial  conditions  are  cursed  with  the  practice  of 
limited  output,  as  compared  with  the  absence  of  this  practice  in 
industrial  German}'.  As  a  consequence,  Germany,  in  time  of 
peace,  has  industrially  outrun  Great  Britain  by  leaps  and  bounds. 

The  British  unionist,  by  practicing  limited  output,  has  thus 
played  directly  into  the  hands  of  his  keenest  industrial  com- 
petitor, the  German. 

I — New  York  Hearings,  U.  S.  Commission  on  Industrial  Relations, 
pp.      2061-2. 


IIJ2  SKLKCT1:D   AKTICLICS 

The  records  of  the  Commission  also  show  that  organized 
labor,  almost  as  a  unit,  is  very  strongly  opposed  to  the  introduc- 
tion in  industn,-  of  what  has  become  known  as  Scientific  Man- 
agement, or  Efficiency  Methods.  In  relation  to  this  phase  of  the 
problem,  we  find  ourselves  at  one  with  the  statement  made  and 
the  opinions  expressed  by  Mr.  Louis  D.  Brandeis  before  the 
Commission  at  Washington,  in  April,  1914,  who,  when  invited 
to  express  his  opinion  on  the  question  of  elTiciency  standards, 
scientific  management,  and  lal)or,  among  otlior  thini;s,  said 

My  special  interest  in  this  subject  arises  from  the  conviction  that,  in 
the  first  place,  working  men,  and  in  the  second  place,  members  of  the 
community  generally,  can  attain  the  ideals  of  our  American  democracy 
only  through  an  immediate  increase  and  perhaps  a  constant  increase,  in 
the  productivity  of  man.  *  •  *  Our  ideals  could  not  be  attained  unless 
we  succeed  in  greatly  increasing  the  productivity  of  man.  »  •  •  The 
progress  that  we  have  made  in  improving  the  conditions  of  the  working 
man  during  the  last  century,  and  particularly  during  the  last  fifty  years. 
has  been  largely  due  to  the  fact  that  intervention  or  the  introduction  of 
machinery  has  gone  so  far  in  increasing  the  productivity  of  the  individual 
man.  VVith  the  advent  of  the  new  science  of  management  has  come  the 
next  great  opportunity  of  increasing  labor's  share  in  the  production,  and 
it  seems  to  me.  therefore,  of  the  utmost  importance,  not  only  that  the 
science  should  be  developed  and  should  be  applied  as  far  as  possible,  but 
that  it  should  be  applied  in  cooperation  with  the  representatives  of  organ- 
ized labor,  in  order  that  labor  may  now,  in  this  new  movement,  get  its 
proper   share. 

I  take  it  that  the  whole  of  this  science  of  management  is  nothing  more 
than  an  organized  effort,  pursued  intensively,  to  eliminate  waste.  *  *  * 
It  is  in  the  process  of  eliminating  waste  and  increasing  the  productivity  of 
man,  to  adopt  those  methods  which  will  insure  the  social  and  industrial 
essentials,  fairness  in  development,  fairness  in  the  distribution  of  t_he 
profits,  and  the  encouragement  to  the  working  man  which  can  not  come 
without    fairness 

I  take  it  that  in  order  to  accomplish  this  result,  it  is  absolutely  essen- 
tial that  the  unions  should  be  represented  in  the  process.  ♦  *  *  When 
labor  is  given  such  a  representation,  I  am  unable  to  find  anything  in 
.Scientific  Management  which  is  not  strictly  in  accord  with  the  interests  of 
labor,  because  it  is  nothing  more  than  fair,  through  the  application  of 
these  methods  which  have  been  pursued  in  other  branches  of  science,  to 
find  out  the  best  and  the  most  effective  way  of  accomplishing  the  result. 
It  is  not  making  men  work  harder — the  very  effort  of  it  is  to  make  them 
work  less  hard,  to  accomplish  more  by  what  they  do,  and  to  eliminate  all 
unnecessary  motion,  to  give  special  effort  and  special  assistance  to  those 
who,  at  the  time  of  the  commencement  of  their  work,  arc  mostly  in  need 
of    the    assistance    because   they    are    less   competent. 

•  *  *  As  I  view  the  problem,  it  is  only  one  of  making  the  employer 
recognize  the  necessity  of  the  participation  of  representatives  of  labor  in 
the  introduction  and  carrying  forward  of  the  work,  and  on  the  other 
hand,  bringing  to  the  working  man  and  the  representatives  of  organized 
labor,  the  recognition  of  the  fact  that  there  is  nothing  in  Scientific  Man- 
agement itself  which  is  inimical  to  the  interests  of  the  working  man,  but 
merely  perhaps  the  practices  of  certain  individuals,  of  certain  employers  or 
concerns   who    have    engaged    in    it. 

I  feel  that  this  presents  a  very  good  opportunity  for  organized  labor. 
It  seems  to  me  absolutely  clear,  as  Scientific  Management  rests  upon  the 
fundamental  principles  of  advance  in  man's  productivity,  of  determining 
what  the  best  way  was  of  doing  a  thing,  instead  of  the  poor  way,  of  a 
complete  coordination  and  organization  of  the  various  departments  of 
business,  that  the  introduction  of  Scientific  Manasement  in  onr  bu.^inesses 
was  certain  to  come;  riiat  those  who  oppose  the  introduction  altogether 
are  undertaking  a  perfectly  impossible  ta«k;  and  that  if  organized^  labor 
fooJc    the    position   of   absolute    oppo.sition,    instead    of   takinp   the   position    of 


.       PROBLEMS    OF    LABOR  193 

insisting  upon  their  proper  part  in  the  introduction  of  this  system,  and 
the  conduct  of  the  business  under  it,  organized  labor  would  lose  its  great- 
est opportunity,  and  would  be  defeating  the  very  purpose  for  which  it 
exists. 

On  being  asked  the  question  what,  in  his  opinion,  v,ould  be 
the  status  of  unionism  in  the  event  of  Scientific  Management 
becoming  a  common  industrial  condition,  Mr.  Brandeis  said : 

I  think  there  would  be  a  great  deal  left  for  unionism  to  do.  and  do  not 
think  the  time  will  come  when  there  will  not  be.  as  long  as  there  is  a 
wage  system  in  existence.  *  ♦  •  I  do  not  feel  that  we  have  reached 
the  limit  of  the  shorter  day,  certainly  not  in  some  employments,  nor  do  I 
think  we  have  reached  the  limit  of  the  higher  wage;  certainly  we  have 
not  reached  the  limit  of  the  best  conditions  of  employment  in  many  indus- 
tries. 

All  of  these  subjects  are  subjects  which  must  be  taken  up,  and  should 
be  taken  up  by  the  representatives  of  the  men  and  women  who  are  par 
ticularly  interested.  There  will  be  work  for  unions  to  do  as  long  as 
there    is    a    wage    system. 

Prohibition  of  Use  of  Nonunion  Made  Tools  and  Material 

The  sixth  reason  oflfered  by  employers  for  refusing  to  rec- 
ognize or  to  deal  with  organized  labor,  is  that  when  they  do  so 
they  are  often  not  permitted  to  use  nonunion  made  tools  or 
materials,  thus  placing  upon  themselves  a  burden  and  a  hardship 
from  which  nonunion  employers  are  free,  and  thus  also  laying 
themselves  liable  to  get  into  all  sorts  of  controversies  with  the 
union,  which  are  vexatious,  annoying,  time-losing,  and,  fre- 
quently, most  costly,  as  they  sometimes  lead,  to  grave  and  serious 
strikes. 

Closed  Shop 

The  seventh  reason  why  many  employers  refuse  to  recognize 
or  to  deal  with  organized  labor  (and  among  these  may  be  men- 
tioned the  employers  of  large  bodies  of  workers  who  have  pre- 
viously had  trade  agreements  with  organized  labor)  is  the  matter 
of  the  closed  shop. 

Many  such  employers  are  quite  willing  to  recognize  and  to 
deal  with  unions  upon  a  tacit  or  written  open  shop  agreement, 
but  they  have  no  confidence,  based  on  their  previous  experience, 
that  an  open  shop  agreement  will  be  respected  by  the  unions. 
Such  employers  labor  under  the  fear  that,  despite  an  open  shop 
agrecinent  or  understanding,  the  union,  at  its  first  opportunity, 
will  force  them  to  compel  the  nonunion  worker  to  join  the  union. 
Employers  such  as  these  are  unwilling  to  place  themselves  in 
the  position  where  the  union  can  control  them  despite  an  open 
shop  agreement  or  understanding,  and,  so  to  speak,  put  a  pistol 
to  their  heads  and  command  them   in  turn   to  command  a  non- 


194  SELECTED   ARTICLES 

union  worker,  on  pain  of  dismissal,  to  join  the  union.  Such  em- 
ployers feel  that,  having  an  open  shop  agreement  or  understand- 
ing, if,  for  any  reason,  a  worker  does  not  choose  to  join  the 
union,  they,  as  employers,  should  no  more  compel  him  to  do  so 
than  they  would  compel  him  to  join  any  particular  fraternal 
society  or  religious  body.  They  feel  that  if  they  are  working 
under  an  open  shop  agreement  or  understanding,  and  such  non- 
union worker  is  capable,  efficient,  and  has  rendered  long  and 
faithful  service,  that  they  are  doing  him  and  themselves  a  great 
injustice  either  to  force  him  into  a  union  or  to  discharge  him 
because  he  will  not  join  a  union. 

Where  an  employer  enters  into  an  agreement  with  a  union 
which  does  not  stipulate  that  only  union  men  shall  be  employed, 
but  leaves  the  employer  free  to  employ  exclusively  union  men, 
or  some  union  and  some  nonunion  men  as  he  may  prefer,  so 
long  as  he  maintains  for  all  men  union  conditions,  in  such 
an  event  the  union  has  no  right  to  demand  that  the  nonunionist 
should  be  compelled  by  the  employer  to  join  the  union  or  a  strike 
will  follow.  For  the  union,  under  such  conditions,  to  strike,  as 
it  has  done  notably  in  the  Pennsylvania  coal  fields,  and  as 
pointed  out  also  by  W.  O.  Smith,  ex-Chairman  of  the  Executive 
Committee  of  the  Kentucky  District  of  the  United  Mine  Work- 
ers of  America,  whose  statements  have  been  quoted  herein,  is  a 
violation,  on  the  part  of  the  union,  of  its  contract. 

It  may  be  held  that  unionists  working  under  an  open  shop 
agreement  or  understanding  always  reserve  to  themselves  the 
right,  for  any  reason  or  for  no  reason,  to  cease  to  work  along- 
side of  nonunion  men,  and  that  they  further  reserve  the  right  to 
determine  the  psychological  moment  at  which  it  is  in  their  inter- 
est to  cease  work  or  to  go  on  a  strike  because  they  will  not  work 
alongside  of  nonunion  men.  It  is  the  fear  of  the  likelihood  of 
their  doing  this  that  frightens  off  many  employers  from  recog- 
nizing or  dealing  with  organized  labor.  They  feel  that  even 
when  they  are  operating  under  an  open  shop  agreement  or  un- 
derstanding, which  does  not  deny  them  the  right  to  employ  non- 
union men  so  long  as  they  work  under  union  conditions,  they 
are  working  with  a  sword  suspended  over  their  heads  by  a 
slender  thread,  which  may  break  at  any  moment,  and  are  liable 
to  have  a  strike  on  their  hands  at  the  most  critical  time,  which 
may  spell  ruin  for  their  business.  Employers,  as  a  rule,  do  not 
deem  it  a  good  business  policy  to  invite  such  risks. 

An   impressive  example  of  this  policy  on  the  part  of  on^an- 


PROBLEAIS    OF   LABOR  IQS 

ized  labor  was  brought  out  in  the  testimony  taken  by  the  Com- 
mission at  Lead,  S.  D.  Superintendent  Grier  of  the  Homestake 
Mining  Company,  Lead,  S.  D.,  at  the  hearing  held  by  the  Com- 
mission at  that  point  in  August,  1914,  stated  that  he  had  recog- 
nized and  dealt  with  the  Lead  City  Miners'  Union  from  1877  to 
1909,  with  the  understanding  that  they  were  at  liberty  to  employ 
union  or  nonunion  men  as  they  preferred.  Late  in  October,  1909, 
a  resolution  was  published  in  the  daily  papers  that  on  and  after 
the  25th  of  November,  1909,  members  of  the  Federation  would 
not  work  wdth  those  working  for  the  Homestake  Mining  Com- 
pany who  failed  and  neglected  to  become  members  of  the  union 
in  good  standing;  and  in  consequence,  on  the  25th  of  November, 
the  mine  was  closed  down,  and  from  that  da}'  on  the  company 
has  not  recognized  nor  dealt  with  organized  labor. 

We  are,  however,  of  the  opinion  that  where  an  employer 
enters  into  an  agreement  with  a  union  which  stipulates  that  only 
union  men  shall  be  employed,  a  thing  which  he  has  both  a  moral 
and  a  legal  right  to  do,  the  nonunion  worker,  in  that  event,  can 
have  no  more  reason  to  find  fault  with  the  employer  in  declining 
to  employ  him,  than  a  certain  manufacturer  would  have  if  the 
employer,  for  reasons  satisfactory  to  himself,  should  confine  his 
purchases  to  the  product  of  some  other  manufacturer. 

Contests   For  Supremacy   Between   Rival    Unions 

Testimony  has  been  given  before  this  Commission  indicating 
in  more  than  one  instance,  that  contests  between  rival  unions,  or 
factions  of  the  same  union,  have  led  to  strikes  causing  industrial 
unrest  from  which  the  worker  as  well  as  the  employer,  has  suf- 
fered harm  and  loss. 

.Acts  of   Violence  Against  Nonunion    IVorkers  and   the 
Properties  of  Employers 

The  ninth  objection  raised  on  the  part  of  the  employers 
against  unionism,  which  has  been  substantiated  abundantly  by 
investigation  and  by  testimony  taken  by  the  Commission,  is  the 
resort  on  the  part  of  unionists  to  violence  in  labor  troubles,  and 
to  the  fact  that  unionists  condone  such  violence  when  committed 
in  the  alleged  interest  of  labor. 

The  most  notable  case,  of  course,  in  modern  industrial  his- 
tory, is  that  of  the  Structural  Iron  Workers,  which  resulted  in 
the  plea  of  guilty  on  the  part  of  the  McNamara  brothers,  for  the 
blowing-up    of    the   Los    Angeles    Time     Building,     killing    over 


196  SKLECTEU   ARTlCLlvS 

twenty  innocent  people,  and  which  further  resuUed  in  l-"ranl< 
Ryan,  the  President  of  the  Structural  Iron  Workers'  National 
Union,  and  a  group  of  other  labor  union  officials,  being  convicted 
and  sentenced  to  prison. 

As  a  matter  of  fact,  the  bringing  into  life  of  this  United 
States  Commission  on  Industrial  Relations  was  due  primarily 
to  the  long  series  of  crimes  committed  at  the  instance  of  the 
Structural  Iron  Workers'  Union,  which  culminated  in  the  blow- 
ing-up of  the  Los  Angeles  Times  Building,  with  its  attendant 
loss  of  life  of  innocent  citizens,  and  which  aroused  a  state  of 
public  sentiment  demanding  that  an  investigation  be  made  by 
an  impartial  Federal  body,  to  inquire  into  the  underlying  causes 
of  industrial  unrest,  the  existence  of  which  seemed  to  be  evi- 
denced by  the  violent  activities  on  the  part  of  labor  in  various 
parts  of  the  country. 

Vincent  St.  John,  Secretary  of  the  Industrial  Workers  of  tlic 
World,  in  his  testimony  before  the  Commission  on  Industrial 
Relations  at  a  public  hearing  in  Xew  York,  said  that  he  believed 
in  vioience  when  it  was  necessary  to  win.  He  said  that  if  the 
destruction  of  property  seemed  necessary  to  bring  results,  then 
he  believed  in  the  destruction  of  property. 

A.  Johannscn  of  California,  State  Organizer  for  the  Huild- 
ing  Trades  of  California,  and  General  Organizer  for  the  United 
Brotherhood  of  Carpenters,  in  his  testimony  before  the  United 
States  Commission  on  Industrial  Relations  at  Washington  in 
May,  1915,  in  speaking  of  the  reelection  of  Frank  Ryan,  Presi- 
dent of  the  National  Structural  Iron  Workers'  Union,  among 
other  things  thanked  the  Lord  that  the  union  had  the  courage 
to  reelect  him  President  after  he  had  been  convicted  as  a  partic- 
ipant in  the  dynamiting  crimes  of  the  Structural  Iron  Workers. 
He  further  expressed  the  hope  that  it  was  true  that  the  convicted 
dynamiters,  after  ])eing  re-elected  to  office  by  the  Iron  Workers, 
were  met  by  a  procession  of  applause  at  Fort  Leavenw^orth  while 
on  their  way  to  prison,  and  that  President  Ryan  performed  his 
ofticial  duties  while  there,  and  rendered  his  official  reports  as 
President  of  a  union  of  10,000  members  and  a  part  of  the  Amer- 
ican  Federation  of   Labor. 

In  contradistinction  to  the  opinion  of  Mr.  Johannsen,  to  the 
effect  that  he  thanked  the  Lord  that  the  union  had  the  courage 
to  reelect  Frank  Ryan  President  after  he  had  been  convicted  a"^ 
a  participant  in  the  dynamiting  crimes  of  the  Structural  Iron 
Workers,  we  have  the  opinion  of  Dr.  Charles  W.  Eliot,  Presi- 
dent  Flmeritus   of    Harvard    University,    who,    in   his   testimony 


PROBLEMS    OF    LABOR  t97 

before  the  United  States  Commission  on  Industrial  Relations  at 

New  York,  January  29th,  1915,  in  referring  to  this  very  instance, 

said,  in  answer  to  the  question  as  to  how  he  regarded  the  action 

of  the  Structural  Iron  Workers'  Union  in  reelecting  Frank  Ryan 

President  after   his   conviction   of   crime,    "As   a   serious   moral 

offense  against  the  community  as  a  whole." 

Speaking   about   respecting  court   labor   injunctions,   Witness 

Johannsen  said: 

I  don't  think  the  power  of  an  injunction  goes  much  beyond  the  cour- 
age of  those  who  are  enjoined.  I  think  that  if  a  person  is  convinced  in 
his  own  mind  and  his  own  feelings  that  his  case  is  just,  that  his  demands 
for  an  increase  of  wages,  or  whatever  the  fight  may  be — if  you  think  and 
feel  you  are  right,  why  then  go  ahead.  Never  mind  about  those  pieces  of 
paper. 

On  being  asked  whether  he  (Johannsen)  believed  that  Frank 
Ryan,  President  of  the  Structural  Iron  Workers'  National 
Union,  and  his  associates,  were  innocent  men  railroaded  to 
prison,  he  said  that  he  did,  and  that  he  was  satisfied  they  never 
committed  any  crime  against  labor  or  a  better  society,  and  were 
therefore  unjustly  convicted.  This  was  his  attitude,  despite  his 
attention  having  been  called  to  the  opinion  and  decision  ren- 
dered by  the  Circuit  Court  of  Appeals,  including  Judges  Baker, 
Seaman,  and  Kohlsaat,  against  whose  integrity  and  fairness  no 
whisper  had  ever  been  heard,  and  who  seemingly  went  into  the 
evidence  in  the  dynamiting  cases  most  exhaustively  and  care- 
fully,' and  who,  among  other  things,  in  their  decision,  said — 

The  facts  thus  recited,  as  proven  by  the  Government  on  the  trial,  may 
be  mentioned  in  part  as  follows:  Almost  loo  explosions  thus  occurred, 
damaging  and  destroying  buildings  and  bridges  in  process  of  erection 
where  the  work  was  being  done  by  open  shop  concerns,  and  no  explosions 
took  place  in  connection  with  work  of  a  similar  character,  where  the  work 
was  done  by  closed  shop  concerns.  *  *  *  in  connection  with  this  work 
of  destruction,  dynamite  and  nitroglycerine  was  purchased  and  stolen, 
and  various  storage  places  arranged  to  conveniently  store  such  explosives 
which  were  to  be  used  in  the  destruction  of  property  in  the  various  States 
referred  to.  *  *  *  Large  quantities  of  dynamite  and  nitroglycerine  were 
at  various  times  stored  in  the  vaults  of  the  Association  at  Indianapolis, 
and  also  in  the  basement  of  the  building.  *  *  «  Four  explosions  oc- 
curred in  one  night  at  the  same  hour  in  Indianapolis,  and  explosions  were 
planned  to  take  place  on  the  same  night,  two  hours  apart,  at  Omaha,  Neb., 
and  Columbus,  Ind.,  and  the  explosions  so  planned  did  occur  on  the  same 
night,  at  about  the  same  time,  instead  of  two  hours  apart,  owing  to  the 
fact  that  one  clock  was  defective.  *  *  »  All  the  dynamite  and  nitro- 
glycerine *  *  *  including  the  expenses  incident  to  the  stealing  of  the 
dynamite,  were  paid  out  of  the  funds  of  the  International  Association,  and 
these  funds  were  drawn  from  the  Association  upon  checks  signed  by  the 
Secretary-Treasurer,  John  J.  McNamara,  and  the  President,  Frank  M. 
Ryan,   plaintiff   in   error. 

The  written  correspondence  on  the  part  of  many  of  the  plaintiffs  in 
error  •  ♦  *  furnish  manifold  evidence  not  only  of  understanding  between 
the  correspondents  of  the  purposes  of  the  primary  conspiracy,  but  many 
thereof  convey  information  or  direction  for  the  use  of  the  explosives, 
while  others  advise  of  the  destruction  which  has  occurred,  and  each  points 
unerringly  not  only  to  the  understanding  that  the  agency  therein  was  that 
of  the  conspirators,  but  as  well  to  the  necessary  steps  in  its  performance 
of   transporting  the   explosives   held   for   such    use.      This   line   of   evidence 


198  SELECTED   ARTICLES 

clearly  tends  to  prove    and  may  well  be  deemed  convincing  of  the  fact  on 
the  part  of  many,   if  not  all,   of  the  correspondents. 

Plaintiff  Frank  M.  Ryan  was  President  of  the  Association  and  of  its 
Executive  Board,  and  was  active  manager  and  leader  of  the  contest,  and 
policies  carried  on  throughout  the  years  of  the  strike  and  destructive  ex- 
plosions in  evidence.  Letters  written  and  received  by  him  at  various  stages 
of  the  contest  clearly  tend  to  prove  his  familiarity  with  and  management 
of  the  long  course  of  destroying  open  shop  structures,  however  guarded  m 
expression.  He  was  at  the  headquarters  of  the  Association  for  the  super- 
vision of  operations  periodically,  usually  two  or  three  days  each  month, 
uniformly  attended  the  meetings  there  of  the  Executive  Board,  and  made 
frequent  visits  to  the  field  of  activities.  »  »  »  i[e  signed  all  of  the 
checks  in  evidence  for  payments  for  expenditures  for  purchase,  storage 
and  conveyance  of  explosives.  *  •  *  Many  other  letters  in  evidence, 
both  from  and  to  him,  however  disguised  in  terms,  may  well  authorize  an 
inference  of  his  complete  understanding  of,  and  complicity  for,  the  ex- 
plosions, both  in  plans  and  execution. * 

Masses  of  testimony  were  filed  with  the  Commission  to 
prove  that  organized  labor  at  times  resorted  to  a  policy  of  law- 
lessness. Among  other  documents  may  be  cited  a  magazine  un- 
der the  title  of  A  Policy  of  Lawlessness,  a  partial  record  of  riot, 
assault,  murder,  and  intimidation,  occurring  in  strikes  of  the 
Iron  Molders'  Union,  during  1904-5-6-7,  published  by  the  Na- 
tional Founders'  Association,  in  which  are  given,  as  a  partial 
list  taken  from  court  records,  a  great  number  of  instances  of 
violence  on  the  part  of  labor  unionists  in  labor  disputes;  and 
also  a  document  published  as  a  report,  submitted  by  the  Com- 
mittee on  Labor  Disputes  of  the  Cleveland  Chamber  of  Com- 
merce, entitled  Violence  in  Labor  Disputes,  giving  hundreds  of 
instances  where  unionists  had  resorted  to  violence  in  labor 
troubles  in  that  community  alone. 

Mr.  Luke  Grant,  special  investigator  for  the  United  States 
Commission  on  Industrial  Relations,  in  his  report  to  the  Com- 
mission on  the  National  Erectors'  Association  and  the  Interna- 
tional Association  of  Bridge  and  Structural  Iron  Workers,  says: 

Do  they  [the  unions]  believe  in  violence?  They  did  not  destroy  prop- 
erty and  they  don't  know  who  did.  They  probably  adopted  resolutions 
denouncing  the  unknown  perpetrators,  and  offering  a  reward  for  their 
arrest  and  conviction.  The  Western  Federation  of  Rlincrs,  in  convention, 
offered  a  reward  for  the  arrest  of  the  men  who  blew  up  the  Independence 
depot  in  June,  190.1,  killing  14  men.  Harry  Orchard  afterward  confessed 
that  he  and  Steve  Adams  did  it,  acting  as  agents  for  the  officers  of  the 
union. 

In  this  way  do  union  men  collectively  approve  of  violence,  tliat  few  if 
any  of  them  would  individually  permit. 

Referring  to  the  industrial  war  between  the  National  Erec- 
tors' Association  and  the  Structural  Iron  Workers'  l^nion,  Mr. 
Grant  continues  to  say : 

When  the  hopelessness  of  the  situation  became  apparent  to  the  union 
officials,  resort  was  made  to  the  destruction  of  property.  Diplomacy  was 
out   of  the  question,  so  dynamite  was   tried. 

I — Washington  Hearings,  May  1915,  U.  S.  Comtnission  on  Indiutrial 
Relations  p.   1004-13. 


PROBLEMS   OF   LABOR  199 

The  report  of  Luke  Grant  brings  out  the  fact  that  the  Struc- 
tural Iron  Workers  had  no  grievances  against  their  employers 
in  the  matter  of  wages,  hours,  or  working  conditions.  The  only 
question  at  issue  was  that  of  the  closed  shop.  To  enforce  the 
closed  shop,  the  Structural  Iron  Workers  seemed  to  feel  them- 
selves justified  in  dynamiting  over  one  hundred  properties  and 
destroying  many  innocent  lives. 

Police  Commissioner  Arthur  Woods,  of  the  City  of  New 
York,  in  his  testimony  before  the  United  States  Commission  on 
Industrial  Relations,  in  May,  1915,  at  Washington,  D.  C,  speak- 
ing of  violence  by  labor  unions,  among  other  things  said : 

The  result  of  our  investigation  shows  a  course  of  procedure  like  this: 
There  would  be  a  strike  and  the  strikers  would  retain  some  gunmen  to  do 
whatever  forcible  or  violent  work  they  needed.  The  employer,  to  meet  this 
violence,  would  in  a  comparatively  small  percentage  of  cases,  and  not  as 
many  cases  as  the  gunmen  were  employed  on  the  other  side,  hire  a  private 
detective  agency.  The  function  that  the  gunmen  were  to  perform  was  to 
intimidate  the  workers  that  were  hired  to  take  the  place  of  the  strikers. 
*  *  *      There  were  three  indictments  for  murder  in   the   first   degree. 

The  question  was  asked  Police  Commissioner  Woods  in  how 
far  his  investigations  had  warranted  the  statement  that  ap- 
peared in  the  New  York  Herald  of  May  14,  1915,  reading  as  fol- 
lows: 

Several  of  the  indictments  mentioned  assault  upon  members  of  the  union, 
and  in  this  connection  District  Attorney  Perkins  said  last  night  that  the 
reign  of  lawlessness  was  caused  by  union  leaders  who  wished  to  perpetuate 
themselves  in  power,  who  hired  assailants  to  assault  contenders  in  their 
own  unions  for  their  places,  and  who  used  their  union  offices  to  extort 
blackmail  under  threats  from  employers.  Seven  men  are  indicted  for  as- 
sault in  a  riot  for  control  of  the  union.  Four  men  are  indicted  tor  hiring 
Dopey  Benny's  men  to  go  to  a  nonunion  factory  and  rough-house  the  em- 
ployees as  they  left,  and  wreck  the  plant.  A  dozen  workers  were  wounded 
in  that  fight. 

Six  union  men  are  accused  of  extortion  and  assault  tn  using  violence 
to  collect  a  fine  of  $ioo  upon  an  employer.  Four  others  are  accused  of 
hiring  the  Dopey  Benny  band  to  shoot  up  a  nonunion  factory.  Many 
shops  were  fired.  The  factory  suffered  a  damage  of  $1000  and  several 
persons  were  injured.  Other  indictments  mentioned  cases  where  the  band 
was  employed  by  union  leaders  to  attack  nonunion  workers,  to  wreck  fac- 
tories, and  even  to  assault  nonunion  men  who  opposed  the  leaders. 
(pp.  964-5-) 

To  all  of  the  foregoing.  Police  Commissioner  Woods  re- 
plied, "That  is  the  general  line  of  things  that  we  found." 

One  of  the  ablest  and  clear-headed  exponents  of  the  cause  of  labor  that 
testified  before  this  Commission  was  Morris  Hillquit  of  New  York.  In 
speaking  of  violence  in  labor  troubles  he  is  quoted  as  saying,^  that  the 
resort  to  violence  and  lawbreaking  was  "ethically  unjustifiaDle  and  tac- 
tically suicidal."  Mr.  Hillquit  pointed  out  that  wherever  any  group  or 
section  of  the  labor  movement  "has  embarked  upon  a  policy  of  "breaking 
the  law'  or  using  'any  weapon  which  will  win  a  fight,'  whether  such 
policy  was  styled  'terrorism,'  'propaganda'  of  the  deed,  'direct  action,' 
'sabotage,'   or    'anarchism,'    it  hat  invariably  served   to   destroy  the  move- 

I — Robert  Hunter,  Violence  and  the  Labor  Movement,  p.  viii. 


200  SKLIXTKD   ARTICL1-:S 

inent,  by  attracting  to  it  professional  criminals,  infesting  it  with  spies, 
leading  the  workers  to  needless  and  senseless  slaughter  and  ultimately  tn- 
gendering  a  spirit   of  disgust   and   reaction." 

Robert  Hunter,  commenting  on  the  foregoing  statement  made 

by  Morris  Hillquit,  says   (p.  viii)  : 

It  will,  I  think,  be  clear  to  the  reader  that  the  history  of  the  labor 
movement  during  the  last  half  century  fully  sustains  Mr.  Hillquit's  posi- 
tion. 

Affprenticcship  Funics 

Tlic  (luestioii  of  apprenticeships  has  k'd  to  much  industrial 
strife  and  consequent  industrial  unrest,  where  imions  have 
arbitrarily  determined  the  number  of  apprentices  that  the  em- 
ployer may   take  on. 

Where  this  practice  has  prevailed  the  union  employer  has, 
in  competition  with  the  nonunion  employer,  been  seriously 
handicapped.  The  remedy  for  this  evil  lies  obviously  in  a 
joint  agreement  under  the  direction  of  the  proposed  State  In- 
dustrial Commissions,  in  which  each  side  has  an  equal  voice  in 
determining  the  proper  quota  of  apprentices  to  be  employed. 

In  conclusion,  it  is  our  desire  to  point  out  that  organized 
lalior  is  chargeable  with  its  lullest  share  of  creating  causes  of 
industrial  unrest,  lx;cause  of  its  sympathetic  strikes,  its  jurisdic- 
tional disputes,  its  labor  union  politics,  its  contract  breaking,  its 
resort  to  violence  in  time  of  trouble,  its  policy  of  limited  output, 
and  its  closed  shop  policy.  There  is  an  al)undance  of  evidence 
in  the  records  of  the  Commission  to  show  that  organized  labor 
is  also  guilty  of  intimidating  courts,  more  especially  the  lower 
criminal  courl^,  to  deal  lightly  with  labor  offenders  charged  with 
criminal  assaults  in  labor  troubles;  and  that  some  judges,  more 
especially  in  the  lower  courts,  toady  to  organized  labor  for 
vote-getting  purposes,  and  dismiss  union  labor  men  guilty 
of  law  breaking,  or  impose  on  them  nominal  penalties  out 
of  all   proportion   to   the   crimes  committed. 

These  various  policies  have  brought  about  their  fullest  sliare 
among  the  workers,  to  say  nothing  of  thi-  injury  inflicted  on 
employers  and  on  society,  of  poverty,  sulTering,  wretchedness, 
miser\-,  discontent,  and  crime.  Organized  labor  will  never  come 
into  its  own,  and  will  indefinitely  postpone  the  day  when  its 
many  commendable  objects  will  be  achieved  in  tlie  broadest 
sense,  until  it  will  cut  out  of  its  program  sympathetic  strikes, 
until  it  can  prevent  cessation  of  work  in  jurisdictional  disputes, 
until  it  can  more  successfully  prevent  labor  union  politics,  until 
it  can   teach   many  in   its  rank  .nnd  file  to  regard  more   sacredly 


PROBLEMS    OF    LABOR  201 

their  trade  agreements,  until  it  can  penalize  its  members  for 
resorting  to  violence  in  labor  disputes,  and  until  it  can  make  it 
a  labor  union  offense  to  limit  output. 

Organized  labor  may  ask,  "If  we  cut  out  the  evil  policies 
complained  of  from  our  program,  what  offensive  and  defensive 
v.eapons  will  be  left  us  with  which  to  protect  ourselves  against 
the  unfair  employer?" 

The  answer  is  that  when  labor  is  effectively  organized,  it  has 
two  most  powerful  weapons  at  its  command  that  the  employer, 
as  a  rule,  dreads  and  fears  because  of  the  great  damage  these 
weapons  can  infiict  on  him,  namely,  the  strike  and  the  primary 
boycott,  both  of  which  are  within  the  moral  and  legal  rights  of 
the  worker  to  use. 

Generally  speaking,  the  evils  complained  of  have  been  elim- 
inated from  the  program  of  the  railway  brotherhoods.  As  a 
consequence,  railway  managers  do  not  hesitate  to  recognize  and 
to  deal  with  the  railway  unions,  to  their  mutual  advantage  and 
satisfaction,  with  the  result  that  collective  bargaining  has  be- 
come the  common  condition  in  the  railway  world.  Railway 
strikes  and  lockouts  have  now  become  most  infrequent,  and  in- 
dustrial unrest  due  to  these  causes  in  this  sphere  of  activity  has 
become   greatly   minimized. 

If  these  evils  are  eliminated  by  organized  labor  from  its 
program,  much  will  have  been  done  to  stimulate  collective  bar- 
gaining and  to  minimize  the  existing  causes  of  industrial  unrest. 
The  remedies  for  all  these  evils  do  not  lie  with  the  employer; 
they  rest  wholly  and  solely  with  unionists.  The  responsibility 
for  the  growth  of  these  evils,  in  our  opinion,  rests  primarily 
with  unionists  who  neglect  their  union  duties,  and  who  are  as 
unmindful  of  their  duties  as  union  men  as  are  many  voters  of 
their  civic  duty  who  remain  at  home  on  election  day. 

We  have  faith  in  the  honesty  of  purpose,  in  the  fairness  of 
spirit,  and  in  the  law-abiding  character  of  the  American  worker, 
and  we  do  not  believe  that  the  rank  and  file  of  American  wage 
earners  are  in  favor  of  many  of  the  practices  of  some  unions 
which  have  subjected  unionism  to  so  much  severe,  but  just, 
criticism.  We  believe  it  is  the  duty  of  each  unionist  regularly 
to  attend  the  meetings  of  his  union,  in  order  that  democracy 
shall  prevail  in  trade  unions  instead  of  an  autocracy  or  despo- 
tism, which  inevitably  follows  where  the  best  membership  fails 
to  attend  union  meetings,  and  thus  permits  the  affairs  of  the  or- 
ganization to  get  into  the  hands  of   incompetent,  ill-judging,   or 


202  SELECTED   ARTICLES 

dishonest  officials,  who,  for  their  selfish  ends,  abuse  the  power 
and  authority  vested  in  them. 

Wherever  there  are  found  honest,  high-minded,  clear  headed, 
labor  leaders — and  in  the  course  of  our  investigations  and  liear- 
ings  we  have  come  into  close  personal  touch  with  many  such  as 
these,  who  have  commanded  our  esteem  and  respect — it  will  be 
found  that,  as  a  rule,  they  represent  unions  where  the  better 
membership  takes  a  lively  and  active  interest  in  the  welfare  of 
the  association,  and  regards  it  as  a  sacred  duty  to  regularly 
attend  its  meetings. 

We  say  frankly  that  if  we  were  wage  earners  we  would  be 
unionists,  and  as  unionists  we  should  feel  the  keen  responsibil- 
ity of  giving  the  same  attention  to  our  trade  imion  duties  as  to 
our  civic  duties. 

The  ideal  day  in  the  industrial  world  will  be  reached  when 
all  labor  disputes  will  be  settled  as  a  result  of  reason,  and  not 
as  a  result  of  force.  This  ideal  day  can  be  hastened  if  the  em- 
ployers, on  the  one  hand,  will  earnestly  strive  to  place  them- 
selves in  the  position  of  the  worker,  and  look  at  the  conditions 
not  only  through  the  eye  of  the  employer  but  through  the  eye  of 
the  worker;  and  if  the  worker  will  strive  to  place  himself  in  the 
position  of  the  employer,  and  look  at  the  conditions  not  only 
through  the  eye  of  the  worker  but  through  the  eye  of  the  em- 
ployer. 

This,  of  course,  means  the  strongest  kind  of  organization  on 
both  sides.  It  means  that  employers  must  drive  out  of  the 
ranks  of  their  associations  the  law  breaker,  the  labor  contract 
breaker,  and  the  exploiter  of  labor.  It  also  means  that,  in  the 
interests  of  fairness,  every  Board  of  Directors  of  an  industrial 
enterprise  should  have  within  its  organization  a  committee  for 
the  special  purpose  of  keeping  the  Board  of  Directors  advised 
as  to  the  condition  of  their  workers.  And  it  finally  means  that 
trade  unions  must,  in  order  to  minimize  the  causes  of  industrial 
unrest,  among  other  things  remove  the  weak  spots  in  unionism 
set  forth  herein,  thereby  hastening  the  day  when  employers  will 
no  longer  fear  to  recognize  and  deal  with  unions,  and  when  col- 
lective bargaining  shall  thus  become  the  common  condition. 

Finally,  we  feel  that  employers,  individually  and  through 
their  associations,  in  common  with  thoughtful  representatives  of 
labor,  should  give  their  fullest  share  of  thought  and  lend  their 
heartiest  cooperation  in  aiding  to  solve,  through  constructive 
legislation  and  other  ways,  the  great  problems  of  vocational  ed- 


PROBLEMS  OF  LABOR  203 

ucation,  continuation  schools,  woman  and  child  labor  apprentice- 
ship, hours  of  labor,  housing,  sickness  insurance,  workmen's 
compensation,  safety  measures,  old  age  pensions,  and  unemploy- 
ment. The  hope  is  therefore  expressed  that  employers  will 
strive  to  work  with  rather  than  against  intelligent  labor  repre- 
sentatives in  aiding,  through  these  various  movements,  to  lessen 
industrial  unrest  and  to  still  further  improve  the  condition  of 
wage  earners  and  their  dependents. 


CAPITALISM    AND    SOCIAL    DISCONTENT^ 

In  these  days  when  capital  is  being  destroyed  on  an  enor- 
mous scale  in  the  European  War,  some  fundamental  ideas  are 
gaining  recognition  by  the  mere  logic  of  events  which  in  the 
piping  times  of  peace  would  have  taken  great  pedagogical  effort 
and  much  time  to  enforce.  Unconsciously,  the  upheaval  of  in- 
dustry m  the  belligerent  countries  is  tied  up  in  every  one's  mind 
with  speculations  as  to  the  diminution  in  the  supply  of  capital 
now  and  in  the  immediate  future  after  the  end  of  the  war. 

The  fundamental  problems  for  the  laboring  men,  however, 
will  not  only  remain,  but  their  pressing  importance  will  be  in- 
tensified by  all  that  is  happening  in  the  war. 

In  some  way  the  belief  has  won  a  wide  support  that  the 
empty-handed  young  workman  is,  and  must  remain,  outside 
the  sacred  precincts  of  industrial  success  because  he  is  denied 
the  hope  and  possession  of  capital.  Or,  as  it  was  expressed  by 
an  intelligent  student :  "What  hope  is  there,  under  the  present 
industrial  system,  for  the  disfranchised  classes?"  No  doubt, 
the  supposition  that  the  laboring  force  is  practically  cut  off  from 
the  possession  and  advantage  of  capital  is  the  basis  for  the  fun- 
damental tenet  of  Socialism  that  the  State  should  control  all 
capitalistic  instruments  of  production  in  the  common  interest 

The  evolution  of  capitalistic  forms  has  gone  on  since  early 
times  almost  in  geometrical  progression  until  we  have  reached 
the  amazing  variety  and  efficiency  of  those  of  the  present  day. 
In  a  time  of  only  rude  forms  of  primitive  capital  the  surplus 
left  for  savings  was  but  small;  and,  in  addition,  the  prevailing 
violence  of  the  times  gave  little  security  to  what  was  saved.  But 
capital  grew  more  rapidly  as  capitalistic  forms  increased.     It  is 

1  By  J.  Laurence  L«ughlin.  North  American  Review.  213:403-52- 
March,    191 6. 


204  SELECTKD    AkTICLKS 

soineiimes  asserted  that  those  of  small  incomes  have  no  margin 
from  which  capital  can  be  saved.  The  mere  fact  of  the  steady 
and  marvelous  growth  of  capita!  as  the  race  has  developed  out 
of  meagre,  primitive  resources  is  the  final  answer  to  any  such 
claim.  Capital  has  become  an  essential  and  powerful  agent  in 
production,  separable  from  labor,  exchangeable  among  men  by 
loans,  practically  unlimited  in  supply,  except  as  it  may  be  limited 
by  the  saving  propensities  of  mankind  and  by  the  materials 
{e.g.,  wood  and  iron)  out  of  vvhicli  the  concrete  forms  of  cap- 
ital may  be  made.  Indeed,  modern  civilization,  the  everyday 
present  well-being  of  the  race,  would  be  wholly  impossible  with- 
out the  efificient  aids  which  man  has  already  created  in  the  multi- 
farious forms  of  capital. 

Capital  serves  to  discount  long-continued  processes  of  pro- 
duction. Since  we  can  obtain  more  goods  by  the  aid  of  capital 
than  without,  we  move  forward,  by  inventions  touching  special- 
ized processes,  to  adopt  methods  absolutely  impossible  without 
more  or  less  durable  forms  of  capital.  Thus  satisfactions  which 
meet  varied  wants  become  more  abundant  and  cheaper  only  as 
industry  is  able  to  use  more  and  more  capital,— that  is,  only  as 
production  becomes  more  capitalistic.  The  only  limit  to  this 
development,  as  has  been  said,  is  the  self-control  and  ingenuity 
of  the  human  mind.  Hence,  not  only  does  capita!  change  the 
relation  of  man  to  his  environment  and  to  his  ability  to  satisfy 
increasing  wants,  but  it  enables  him  to  create  a  system  of  in- 
dustry involving  an  extensive  quality  of  cooperation  and  division 
of  labor  (as  against  primitive  individualism),  which  would  be 
wholly  impossible  without  it.    This  is  the  outcome  of  capitalism. 

We  thus  come  to  see  capitalism  as  a  highly  beneficicnt  in- 
fluence in  the  economic  world.  It  has  enlarged  the  comfort  and 
range  of  consumption  of  the  poorest  toiler  on  the  earth.  That 
truth  is  unmistakable.  Then  why  is  it  that  in  the  labor  liter- 
ature of  our  day  "capitalism"  is  used  as  a  term  of  reproach, 
or  objurgation?  What  really  resides  ni  the  hopeless  lament 
that  the  laboring  classes  are,  in  respect  of  capital,  "disfran- 
chised"? 

Capitalism  probably  has  the  connotation  in  the  minds  of  those 
who  thus  express  themselves  that  it.is  responsible  for  the  separa- 
tion of  mankind  into  employers  and  employees,  into  masters  and 
servants.  Why  is  it  that  in  the  world  of  industry  some  men  arc 
employers  and  some  are  employed?  To  some  of  those  who 
have  lately  come   from  nations  having  privileged   classes,  where 


PROBLHAIS    OF    LABOR  205 

many  are  born  to  wealth  without  effort  of  their  own,  it  may 
seem  that  all  capital  is  unjustly  owned  by  its  possessors.  But 
apart  from  inheritance,  gifts  by  privilege,  and  robbery,  the 
enormous  mass  of  modern  industrial  capital  has  come  into 
existence  by  a  personal  process  of  saving,  by  abstention  from 
personal  consumption  in  order  to  get  it  for  productive  uses. 
The  original  of  capital  has  both  a  psychic  and  a  physical  element. 
Given  a  strong  desire  to  save,  the  amount  of  capital  accumulated 
will  vary  with  the  margin  from  which  savings  can  be  made ;  or, 
given  the  margin,  large  or  small,  the  amount  saved  will  vary 
with  the  ability  to  realize  the  future.  Anything,  therefore, 
which  will  increase  the  power  of  the  future  over  the  present 
will,  other  things  being  equal,  increase  the  amount  of  capital. 

The  creation  and  legitimate  possession  of  capital,  conse- 
quently, requires  certain  personal  qualities, — willingness  and 
imagination  enough  to  weigh  a  future  gain  over  against  a  pres- 
ent indulgence,  self-control,  patience,  persistence,  foresight,  and 
prudence.  Those  who  have  these  homely  virtues  become  the 
possessors  of  capital,  and  hence  employers  of  others ;  while 
those  who  have  them  not,  and  own  no  capital,  must  seek  those 
who  have  capital ;  and  hence  are  employed  by  others.  The  sepa- 
ration into  the  two  great  classes  of  the  employers  and  the  em- 
ployed is  thus  due  to  differences  in  liuman  qualities ;  differences, 
however,  of  a  kind  which  can  be  removed  by  training,  environ- 
ment, and  the  developm.ent  of  character  and  civilization.  More- 
over, is  it  not  a  beneficient  order  of  things  by  which  material 
success — which  appeals  strongly  to  many  who  are  deaf  to  ordi- 
nary moral  and  religious  appeals^is  set  forth  as  a  reward  for 
the  exercise  of  many  of  the  simplest  virtues?  Indeed,  one  of 
the  fundamental  weaknesses  of  Socialism  is  that  it  promises 
to  its  votaries  the  possession  of  capital  through  the  action  of 
the  State,  without  any  personal  sacrifice  on  their  part  and  by 
removing  the  very  stimulus  to  character  and  virtue  laid  upon 
them  by  the  existing  system  of  society' — more  or  less  faulty 
though  that  system  may  be  in  other  ways. 

We  are  logically  forced  to  the  conclusion,  therefore,  that 
there  is  no  limit  to  the  supply  of  this  immensely  powerful 
and  necessary  factor,  capital,  except  the  total  increase  of 
wealth  over  maintenance,  and  the  willingness  to  save.  There 
is.  then,  no  possible  monopoly  in  capital.  By  the  spread  of 
intelligence  and  science  the  total  wealth  from  which  savings 
can    be    made    is    increasing,    precisely    because    new    forms    of 


2o6  SELECTED   ARTICLES 

capital  are  being  constantly  devised  which  are  over  enlarg- 
ing the  productive  forces  of  mankind.  To  this  process  there 
is  no  end.  There  is,  also,  no  monopoly  of  the  powers  of  men 
to  labor  or  to  postpone  consumption.  It  is  a  matter  to  be  de- 
cided only  by  the  individual  himself.  He  is  not  restrained  or 
"disfranchised"  by  any  power  outside  himself.  If  a  young  man 
with  limited  skill  and  intelligence  ignorantly  marries  without 
iiaving  saved  anything  and  immediately  begets  a  large  family 
of  children,  of  course  he  finds  it  hard  to  save  on  a  very  small 
income;  and  hence  he  may  regard  the  man  who  has  already  ac- 
cumulated capital  as  a  monopolist  to  whom  he  must  go  for 
employment.  The  situation,  however,  is  one  of  the  laborer's 
own  creating;  the  fault  is  not  in  the  existing  system  of  society, 
nor  in  any  limitation  to  capital,  which  can  be  saved  by  any 
one  who  is  willing  ro  comply  with  the  rules  of  the  game  set 
by  the  character  of  human  nature  and  our  external  environ- 
ment. In  short,  the  improvement  of  the  position  of  the  poorer 
laborer  is  largely  dependent  on  internal  ethical  growth  and 
self-control.  The  remedy  is,  in  the  main,  not  social,  but  per- 
sonal. 

Such  being  the  essential  reasons  why  some  men  are  emplojers 
and  others  are  employed,  why  some  men  have  capital  and 
others  not,  the  very  natural  ambition  of  those  who  have  meagre 
incomes  to  enlarge  them  has  created  what  we  have  come  to 
describe  as  "social  discontent."  It  would  be  very  unfortunate 
if  those  having  little  did  not  wish  to  have  more  of  this  world's 
goods,  in  order  that  they  might  be  freed  from  the  deadening 
effects  of  monotonous  labor  without  the  hope  of  a  decent  and 
clieerful  environment.  Therefore,  "social  discontent"  is  not  a 
tiling  to  be  decried;  but  a  thing  which,  if  it  did  not  exist,  we 
should  wish  to  create  and  stimulate  as  a  means  of  establishing 
the  very  motive  for  progress  in  those  who  sometimes  have  no 
ambition  and  think  they  are  "disfranchised"  (in  the  industrial 
sense).  Thus  given  the  motive,  how  may  we  state  the  means 
to  the  given  end?  We  are  all  agreed  in  wishing  for  larger 
incomes  for  those  in  the  harder  walks  of  the  unskilled;  but 
the  really  difficult  thing  is  to  come  to  an  agreement  upon  the 
means  of  reaching  the  end  desired  by  us  all. 

Perhaps  the  one  instrumentality  for  increasing  the  shares 
of  workingmen  which  has  become  sacrosanct  in  tlie  hihor  world 
is  the  union.  Is  this  a  means  likely  to  accomplish  the  desired 
end?     Let    us    examine   this   means   dispassionately,    and    solely 


PROBLEMS    OF   LABOR  207 

with  the  aim  of  testing  its  probable  efficacy  for  raising  the  stand- 
ard of  living,  and  for  increasing  the  consumption,  comfort, 
and  enjoyment  of  the  lower  range  of  laborers. 

The  laborers  are  urged  to  regard  "trade-unions  as  the  means 
through  which  to  work  out  their  economic  salvation."  1  Not 
only  are  unions  to  provide  "just  wages,"  but  to  bring  about  an 
equitable  distribution  of  wealth : 

Trade-unionism  stands  for  the  constructive  development  of  society,  it 
seeks  the  more  equitable  distribution  of  wealth  in  order  that  all  our 
people  may  develop  to  the  extent  of  their  highest  and  best  possibilities.'- 

To  such  an  extent  has  this  type  of  mind  gone  in  insisting 
on  the  union  as  the  one  agent  at  hand  for  bringing  about  a 
rise  of  wages  and  the  progress  upwards  of  the  laboring  classes 
that  its  vision  is  obscured  for  any  other  means — and  this  mainly 
on  the  ground  that  the  union  is  the  only  practical  means  by 
which  to  reform  an  inequitable  system  of  distribution.  Tre- 
mendous energy  has  been  put  into  the  cause  of  Unionism  in 
this  behalf.  That  unions  have  an  important  place  in  our  eco- 
nomic Hfe  no  one  doubts;  but  to  suppose  that  the  union  is  the 
solution  of  the  problem  of  equitable  distribution  no  one,  in  his 
economic  senses,  believes. 

Elsewhere  I  have  tried  to  emphasize  the  point — not  new  by 
any  means — that  unions  are  characterized  by  the  basic  principle 
of  monopoly  of  labor.  Their  whole  economic  purpose  is  to 
try  to  raise  wages  at  a  given  time  and  place  by  limiting  the 
supply  of  labor  obtainable  by  employers.  To  this  it  has  been 
replied  that  "a  labor-union  is  not  a  combination  or  conspiracy 
in  restraint  of  trade";  that  no  decision  of  the  courts  has  de- 
clared that,  under  the  anti-trust  act,  an  organization  of  work- 
men "is  an  unlawful  monopoly."  Of  course  not;  nor  is  any  law-- 
ful  organization.  The  real  point  at  issue  is:  Does  this  or  that 
particular  combination  of  laborers  commit  acts  in  restraint  of 
trade?  If  it  does,  it  comes  under  the  penalties  of  the  act,  as 
in  the  case  of  the  Danbury  Hatters. 

Moreover,  in  reply  to  the  truism  that  unions  are  based  on 
the  principle  of  monopol}',  a  somewhat  irrelevant  reply''  is  given 
that  a  distinction  should  be  made  between  organizations  formed 
to  control  the  prices  of  commodities  such  as  the  necessities  of 
life    (referring,   of  course,   to  the  so-called  trusts),   and  those 

1  John    Mitchell:       "The     Economic      Necessity     of      Trade-Unionism," 
Atla}itic    Monthly,    February,    1914. 
'  Ibid.    p.    169. 
*  John   Mitchell,   supra,    p.    164. 


2o8  SKLl-XTKl)    ARTICLES 

"formed  for  the  purpose  of  defending  and  promoting  the  in- 
terests of  the  wage-earners"  (meaning,  of  course,  labor- 
unions).  This  is  obviously  an  appeal  to  the  feeling  of  humanity 
which  should  not  regard  human  beings  as  if  they  were  inani- 
mate goods.  Of  course  labor  stands  in  a  different  category  from 
goods,  and  the  conditions  affecting  their  supply  are  entirely  dif- 
ferent :  on  that  we  are  all  agreed.  But  that  distinction  is  irrele- 
vant to  the  point  at  issue.  There  are  organizations  of  men 
known  as  producers  "for  the  purpose  of  defending  and  promot- 
ing their  interests,"  and  there  are  organizations  of  men,  known 
as  laborers  "for  the  purpose  of  defending  and  promoting  their 
interests."  Both  are  organizations  of  men;  and  both  are  sub- 
ject to  the  same  law  regulating  the  actions  of  men,  if  either 
should  attempt  to  restrain  trade.  It  is  sophistical  to  speak  as 
if  one  group  were  affected  by  law  and  the  other  not. 

This  sophistical  reasoning  goes  farther.  It  is  claimed  that 
the  Anti-trust  Act  was  never  intended  to  apply  to  organizations 
having  no  capital  stock,  not  dealing  in  products  of  labor,  and 
not  organized  for  a  profit.  It  can  make  no  more  difference 
whether  an  organization  violating  the  law  has  capital  stock  or 
not  than  whether  a  violator  of  the  peace  has  blue  eyes  or 
brown  eyes.  It  can  make  no  difference  what  a  combination 
ostensibly  deals  in,  or  whether  its  profits  are  large  or  small ;  the 
real  issue  must  always  be,  has  it  violated  the  law  of  the  land? 
Why  then  should  any  one  be  pained  to  find  unions  included 
under  the  provisions  of  the  Anti-trust  Act?  They  could  not  be 
included  merely  as  organizations,  no  matter  what  their  pur- 
pose, if  they  did  nothing  objectionable  under  the  law.  If  the 
members  of  a  union  are  proved  to  have  restrained  trade  there 
is  no  reason  why  they  should  not  be  regarded  as  violators  of 
•he  law  as  well  as  any  other  persons  or  organizations. 

Since  the  formative  principle  of  a  union  is  a  restriction 
of  employment  to  its  own  members,  the  attitude  of  labor 
leaders  to  it  is  highly  important.  It  bears  on  the  large 
question  of  the  proper  means  by  which  the  workingmen  may 
better  their  position.  This  attitude  is  briefly  summed  up  as 
follows :' 

If  it  eventually  should  be  held  that  labor  unions  as  such  are  monopolies 
in  restraint  of  trade  and  thus  subject  to  dissolution  by  order  of  the  court, 
no  greater  disaster  to  the  orderly,  rational  and  constructive  development 
and  progress  of  the  wage-earning  masses  will  have   occurred. 

'  John    Mitchell,    supra,    p.    163. 


PROBLEMS    OF   LABOR  209 

Obviouslj-  no  union  whose  acts  are  lawful  is  in  danger  of 
dissolution.  "Trade-unions,"  it  is  claimed,  "strive  for  peace 
based  upon  industrial  righteousness."-  The  inference  is  that 
whatever,  in  the  eyes  of  the  Unionists,  is  "industrial  righteous- 
ness," whether  forbidden  by  law  or  not,  should  be  allowed  to 
unions  without  danger  of  dissolution.  Who  is  to  decide  what 
it  is?  The  union  is  to  remain  peaceful,  provided  there  is 
allowed  to  it  what  it  itself  interprets  to  be  "industrial  righteous- 
ness." 

Quite  apart  from  the  abuses  of  union  organization  (which 
are  separable  from  the  legitimate  services  of  unions),  the  eco- 
nomic function  of  the  union  is  what  most  concerns  us.  Taking 
it  at  its  best,  can  it  produce  the  results  claimed  for  it? 

As  has  been  said,  the  essential  principle  of  it  is  the  monopoly 
of  labor.  It  can  accomplish  its  aim  of  raising  the  wages  of  its 
members  only  by  the  limitation  of  competitors.  If  the  whole 
supply  of  labor  were  under  control,  then  the  union  could  pro- 
duce a  complete  monopoly  and  fix  price ;  but  since  this  is  hu- 
manly speaking,  impracticable,  there  can  be  attempts  at  fixing 
price  only  by  artificial  monopoly.  The  reason  of  this  failure 
to  function  as  a  perfect  monopoly  is  obvious.  The  supply  of 
labor  through  births  cannot  be  controlled  by  unions,  as  now 
conducted.  If  the  supplj'  of  workers  is  certain  to  come  forward 
for  physiological  reasons  quite  irrespective  of  union  policy,  it 
is  useless  to  assume  any  power  by  unions  to  fix  prices  of  labor 
through  control  of  supply.  And  yet  that  is  the  central  theory 
of  LTnionism. 

Are  unions  indeed  the  only  means  at  hand  to  accomplish 
"the  orderly,  rational  and  constructive  development  and  prog- 
ress of  the  wage-earning  masses"?  The  statement  made  in 
John  Stuart  Mill's  day  still  remains  true,  that  the  extraordinary 
progress  made  in  industrial  output  and  efficiency  of  production 
for  many  decades  has  not  been  accompanied  by  a  corresponding 
enlargement  in  the  income  and  consumption  of  the  wage-receiving 
classes;  because  numbers  have  increased  as  production  has  ad- 
vanced, and  a  larger  total  dividend  has  been  spread  over  more 
divisors,  giving  to  each  laborer  a  not  much  larger  quotient  than 
before.  If  this  be  true,  the  future  progress  of  the  laboring 
population  depends  upon  something  more  than  fractional  ad- 
vances in  their  wages.     Is  it  not  beginning  to  dawn  upon  the 

^  Ibid,    p.     162. 


2IO  SELECTED   ARTICLES 

real  friends  of  labor  that  betterment  cannot  be  permanently  or 
even  sensibly  advanced  so  long  as  men  are  merely  receivers  of 
wages?  The  union,  however,  assumes  that  all  depends  upon  the 
matter  of  wages.  And  yet,  looking  back,  can  any  sympathetic 
friend  of  labor  be  satisfied  with  the  gains  which  the  workers 
of  our  race  have  won  through  the  mere  receipt  of  wages? 

The  central  reason  why  the  union  is  not  a  means  competent 
to  solve  the  problem  of  an  inequitable  system  of  distribution  is 
that  it  confines  its  attempts  to  control  the  price  of  labor  to  a 
means  of  controlling  supply  which  is  really  illusory.  Moreover, 
the  price  of  anything  is  also  affected  by  whatever  touches  the 
demand  for  it.  The  thing  to  be  acquired  must  have  such  quali- 
ties as  will  excite  in  the  demander  a  belief  that  it  will  satisfy 
his  need.  Granting  the  need,  and  the  ability  to  pay,  the  price 
will  be  affected  by  the  utility  of  the  thing  to  be  marketed. 
Other  things  being  equal,  the  greater  the  efficiency  or  utility  of 
labor  the  greater  the  demand  for  it.  This  is  one  reason  why 
skilled  labor  may  command  higher  wages  than  unskilled.  Does 
the  union  aim  to  develop  efficiency  and  utility  in  labor,  in  order 
to  obtain  higher  wages?     Not  usually. 

Another  economic  difficulty  has  been  blinked  by  those  who 
rest  their  hopes  alone  on  wages,  and  try  to  connect  the  wages 
to  be  paid  with  the  value  of  the  product  turned  out.  Even 
some  respectable  authorities  fail  to  see  that  two  separate  pro- 
cesses of  valuation  are  going  on,  each  independent  of  the  other, 
both  in  time  and  in  conditions  of  demand  and  supply.  The  bar- 
gaining for  wages  to  workmen  goes  on  at  a  time  before  the 
goods  of  which  they  are  working  have  been  produced ;  and  la- 
bor leaders  are  right  who  insist  that  the  supply  of  labor  and 
the  demand  for  it  are  affected  by  all  that  characterizes  human 
beings  on  the  one  hand  as  distinct  from  those  that  characterize 
inorganic  matter  on  the  other.  The  supply  of  labor  comes  for- 
ward as  a  result  of  the  strongest  instinct  in  human  beings ;  and 
the  demand  for  labor  can  come  only  from  those  who  can  pay 
for  it  (i.e.,  with  funds  saved).  On  the  other  hand,  the  finished 
product  is  priced  at  a  time  after  the  bargaining  for  labor  has 
been  settled;  and  the  supply  of  goods  comes  forward  in  an- 
swer to  an  offer  of  purchasing  power,  and  under  conditions  in- 
fluenced by  efficiency  of  production,  the  condition  of  the  arts, 
inventions,  divisions  of  labor  and  the  like.  The  price-making 
process,  therefore,  is  clearly  distinct  in  time  and  conditions  for 
labor  on  the  one  hand,  and  goods  on  the  other.     The  obvious 


PROBLEMS   OF   LABOR  211 

conclusion  from  this  admitted  fact,  then,  is  that  methods  of  rais- 
ing wages  must  be  of  a  kind  to  affect  the  pricing  of  labor,  and 
are  more  or  less  remote  from  those  affecting  the  pricing  of 
goods. 

The  upshot  of  the  whole  matter  is  clear  in  logic  and  in 
experience.  Permanently  to  raise  wages  of  any  group  of 
laborers,  we  must  raise  their  productive  power,  or  their  utility, 
to  the  demander.  To  do  that  is  to  place  them,  by  natural  mon- 
opoly, in  the  class  of  the  skilled,  where  their  numbers  are  more 
or  less  limited  relatively  to  the  unskilled.  In  other  words,  sup- 
ply is  directly  affected  to  the  permanent  advantage  of  those  in- 
cluded. Thus  the  artificial  monopoly  of  the  union  (which  mis- 
takenly aims  at  restriction  of  supply  without  an  advance  in 
quality)  is  avoided. 

More  than  this,  the  mere  receivers  of  wages,  in  bargaining 
for  a  definite  wage  before  work  is  undertaken,  thereby  contract 
themselves  out  of  risk.  If  the  pricing  of  goods  goes  wrong 
and  a  loss  to  the  employer  results,  the  claim  of  the  receiver  of 
wages  is  unimpaired.  But  as  the  wage-getter  is  thus  freed  from 
all  risk  he  is  also  cut  off  from  all  exceptional  gains.  The  factor 
assuming  industrial  risk  is  the  one  that  obtains  all  exceptional, 
or  differential,  gains  or  losses  due  to  unexpected  changes  affect- 
ing the  price  of  goods.  In  a  young  country  like  the  United 
States  a  well-established  business  gains  in  volume  by  the  mere 
growth  of  population  and  industr}'.  Aloreover,  the  resources 
and  opportunities  of  such  a  country  are  but  partly  known,  and 
are  con.stantly  opennig  to  the  enterprising  man  who  can  control 
capital.  These  new  enterprises,  since  accompanied  by  more  or 
less  risk,  if  successful,  bring  in  exceptional  gains.  In  addition, 
the  land  of  the  new  country  rises  in  value  as  it  is  more  densely 
settled;  in  fact,  most  farmers  of  the  last  generation  have  gained 
less  by  raising  crops  than  by  the  rise  in  the  price  of  land. 

Consequently  we  are  obliged  not  only  by  experience  but  by 
economic  analysis  to  face  the  fact  that  the  improvement  of  the 
wage-earning  masses  can  be  gained  only  by  a  policy  quite  dif- 
ferent from  the  one  accepted  in  the  past,  and  which  forms  the 
essence  of  Unionism.  To  rise  to  a  higher  level  the  laborer 
must  get  some  of  the  advantages  possessed  by  the  employer  and 
the  risk-taker,  and  thus  obtain  some  of  the  inevitable  differential 
gains  characteristic  of  a  new  and  growing  country.  In  short, 
the  true  remedy  for  a  healthy  "social  discontent"  is  more  capital- 


212  SELECTED   ARTICLES 

ism.  Heterodox  as  this  advice  may  seem,  the  more  it  is  pon- 
dered the  more  practical,  effective  and  successful  it  will  prove. 
The  differences  marking  off  the  possessors  of  capital  from 
those  who  have  none  are  due,  as  already  pointed  out,  to  dif- 
ferences in  training  and  in  human  qualities.  There  is  no  mon- 
opoly in  existence  to  prevent  any  pc>rson  from  acquiring  the 
power  to  weigh  a  future  gain  over  against  a  present  indulgence, 
to-  get  self-control,  patience,  foresight,  prudence,  thrift,  and 
good  judgment.  No  one  has  been  thus  "disfranchised."  If  a 
person  has  these  qualities,  he  inevitably  becomes  a  possessor  of 
savings,  and  is  thus  a  capitalist.  The  qualities  which  come  with 
the  saving  of  capital  will  also  work  to  restrict  imprudent  mar- 
riages and  the  birth  of  more  children  than  can  be  properly  fed 
and  educated.  In  short,  by  directing  attention  to  the  develop- 
ment in  the  laborers  of  certain  essential  qualities,  and  calling 
upon  all  the  educative  forces  of  philanthropy  and  organized  so- 
ciety to  aid  in  that  purpose,  we  shall  answer  "social  discontent" 
by  some  permanent  gains  to  industrial  efficiency  and  wages, 
and  bring  to  the  support  of  the  wage-earning  masses  the  wide- 
reaching  influences  of  capitalism. 


COLLECTIVE    BARGAINING^ 

Organization  of  labor  has  become  a  recognized  institution  in 
all  the  civilized  countries  of  the  world.  It  has  come  to  stay ;  it 
is  full  of  usefulness  and  is  necessary  to  the  laborer.  It  shows 
serious  defects  at  times  and  in  some  unions.  These  are  an  ap- 
parent willingness  to  accept  benefits  enforced  through  a  fear  of 
lawlessness,  a  disposition  to  use  duress  to  compel  laborers  to 
join  unions,  and  efforts  to  limit  output  and  to  create  a  dead 
level  of  wages,  and  thus  wipe  out  the  necessary  and  useful 
difference  in  compensation  of  those  who  are  industrious  and 
skillful  and  those  who  are  lazy  and  do  not  strive  to  increase 
the  product  of  the  employer  whom  they  serve. 

These  are  evils  that  as  the  unions  grow  in  wise  and  intelligent 
leadership  we  may  well  hope  are  being  well  minimized. 

Much  can  be  done  by  employers  in  anticipating  just  demands 
of  employees.     Workers  have  had  too  many  instances  of  holdin!.: 

'  By  William   Howard  Taft. 


PROBLEMS    OF    LABOR  213 

back  of  employers  until  they  are  forced  to  justice.  Too  many 
employers  seek  to  justify  failure  to  raise  wages  by  pointing  to 
their  welfare  work  for  their  employees.  This  is  of  a  paternal 
character  and  impresses  the  workers  with  the  idea  that  they  are 
being  looked  after  as  wards  and  not  treated  as  men  capable  of 
exercising  independent  discretions  to  their  welfare.  They  are 
apt  to  give  the  employers  the  idea  that  it  is  a  generous  conces- 
sion they  are  making  out  of  the  goodness  of  their  hearts  and 
that  they  are  not  merely  yielding  a  right  for  a  quod  pro  quo 
for  what  they  receive. 

The  most  difficult  persons  to  deal  with  are  the  extremists  on 
both  sides.  On  the  side  of  labor  there  seems  to  be  much  sus- 
picion by  one  leader  or  another,  that  few  are  willing  to  make  a 
just  concession,  not  because  they  don't  recognize  its  justice,  but 
because  if  they  admit  it  they  are  charged  with  betraying  the 
cause  of  labor.  Thus  they  furnish  to  their  rivals  in  leadership 
among  workingmen  the  opportunity  to  undermine  their  standing 
with  their  fellows.  This  often  puts  the  labor  side  in  an  inde- 
fensible position  and  offers  to  its  enemies  a  basis  for  criticism 
that  might  easily  be  avoided. 

On  the  other  hand,  there  is  among  employers  the  Ijourbon, 
the  man  who  never  learns  anything  and  never  forgets  anything; 
the  man  who  says :  "It  is  my  legal  right  to  manage  my  business 
as  I  choose,  to  pay  such  wages  as  I  choose,  to  agree  to  such 
terms  of  employment  as  I  choose,  to  exclude  from  my  employ- 
ment union  men,  because  I  don't  approve  of  the  tenets  of  the 
union,  and  to  maintain  a  family  arrangement  of  my  own.  I  do 
fairly  by  my  men  ;  I  pay  them  what  I  think  is  right,  and  they 
will  not  complain  unless  some  outside  union  agent  interferes.  I 
run  a  closed  non-union  shop,  and  I  am  happy  and  propose  to 
continue  happy." 

This  man  is  far  behind  in  the  progress  of  our  social  civiliza- 
tion. He  lacks  breadth  of  vision  extending  beyond  the  confines 
of  his  shop.  He  looks  to  fear  of  courts  and  injunctions  and 
police  and  militia  as  the  ordinary  and  usual  instruments  for  con- 
tinuing his  business  peacefully  and  maintaining  his  rights.  He 
is  like  the  man  who  regards  the  threat  of  a  divorce  court  as  a 
proper  and  usual  means  of  continuing  domestic  happiness.  He 
does  not  recognize  that  we  have  advanced  beyond  the  state  in 
which  employers  and  employees  are  mere  laws  unto  themselves. 

He  does  not  see  that  the  whole  public  is  interested  in  indus- 


214  SELECTED   ARTICLES 

trial  peace.  He  does  not  see  that  the  employers  have  certain 
duties  social  in  their  nature  that  are  not  defined  and  are  not 
enforcible  in  law,  but  exist  just  as  family  duties  of  care  and 
afifection  exist.    He  has  not  followed  the  growth  of  things. 

As  long  as  the  system  that  he  insists  upon  continued,  in- 
dividual laborers  were  at  the  mercy  of  their  employers.  What- 
ever they  got  was  a  concession.  They  could  not  maintain  them- 
selves in  a  contest  with  their  employer,  dependent  as  they  were 
on  their  daily  wage,  and  independent  as  he  was  with  accumulated 
capital.  That  very  unjust  situation  led  to  the  organization  of 
labor  that  the  employee  by  massing  contributions  may  maintain 
himself  during  an  industrial  struggle  without  wages. 

This  has  come  to  collective  bargaining,  which  is  bargaining 
by  the  group  system.  A  group  of  laborers  knowing  their  rights 
and  knowing  how  to  maintain  them,  put  themselves  on  a  level 
with  the  employers,  and  the  result  reached  is  far  nearer  a  just 
one  than  any  before  attained.  That  it  may  often  be  unjust,  goes 
without  saying,  but  so  are  all  human  attempts  to  reach  the  right 
line.  Of  course  those  individual  laborers  who  do  not  see  the 
advantage  to  them  of  the  group  system  have  a  right  to  stay  out 
and  must  be  protected  in  doing  so.  But  whether  we  will  or  not, 
the  group  system  is  here  to  stay,  and  every  statesman  and  every 
man  interested  in  public  affairs  must  recognize  that  it  has  to  be 
dealt  with  as  a  condition,  to  be  favored  in  such  a  way  as  to 
minimize  its  abuses  and  to  increase  its  utility. 

The  workingmen  of  the  country  since  the  war  began  and  the 
importance  of  their  group  action  has  been  emphasized  by  the 
requirements  of  the  war,  have  been  given  a  sense  of  power  in 
their  united  action  which  we  must  recognize  and  deal  with.  Of 
course,  they  may  abuse  this  power;  and  if  so,  they  may  find  that 
they  are  not  the  entire  community;  but  if  under  level-headed 
leadership  they  do  not  push  it  to  an  excess  they  will  he  able  to 
do  much  for  their  members  and  indeed  for  the  comnumity  at 
large. 

The  junkers  and  the  hunkers  on  both  sides  must  stand  aside 
and  will  be  set  aside  if  common  sense  prevails.  The  danger 
from  bolshevism  is  far  greater  than  from  reaction  to  the  bour- 
bon type  of  employment.  The  intelligent  and  conservative  lead- 
ers of  the  lal)or  movement  should  be  encouraged.  Their  diffi- 
culties in  dealing  with  their  extreme  constituents  should  be 
recognized. 


PROBLEMS    OF   LABOR  215 

ETHICS  OF  COLLECTIVE  BARGAINING* 

A  British  View 

Wage-Earners  in  Britain  who  have  brought  thought  to  bear 
upon  the  conditions  of  their  employment  have  long  been  con- 
vinced that  organization  of  the  workers  and  collective  contracts 
for  the  sale  of  labor  were  essential  securities  for  a  living  wage 
and  other  elements  of  economic  welfare.  It  was  no  social  theory 
which  brought  this  demand  for  collective  bargaining  to  the  fore- 
front of  labor  policy,  but  the  plain  teaching  of  experience  which 
led  the  individual  worker  to  perceive  the  disadvantages  of  a 
forced  sale  of  his  productive  energy  to  a  wealthy  buyer  who 
was  under  less  pressure  to  buy  than  he  to  sell,  and  who  usually 
could  drive  down  the  price  by  reason  of  an  over-supply  in  the 
labor  market. 

Under  the  pressure  of  this  teaching,  labor  in  man}-  of  our 
leading  industries,  mines,  railways,  docks,  engineering  shops, 
textile  factories,  printing  works,  etc.,  became  so  well-organized 
that  bargaining  between  the  unions  and  the  organizations  of 
the  employers  became  the  normal  and  accepted  method  of  labor- 
contract.  In  many  of  these  industries,  there  Vv'ould  remain  a 
minoritj'  of  unorganized  workers  forming  non-union  shops,  or 
surviving  as  a  negligible  factor  in  strongly  unionized  businesses. 
Similarly  on  the  side  of  the  employers,  there  were  firms  which 
persistently  stood  out  of  the  Association,  insisting  on  the  right! 
and  practice  of  special  wage  and  other  arrangements  with  their 
employees.  This  right  of  "free  labor,"  or  as  it  is  called  in 
.\merica,  the  "open  shop,"  was  maintained  even  in  the  well-or- 
ganized industries  by  an  ever-dwindling  minority  of  business. 
In  less-organized  trades,  particularly  where  women  and  low- 
skilled  men  were  largely  employed,  it  had  a  stronger  basis  of 
survival. 

And  yet  it  would,  I  think,  be  a  just  generalization  to  assert 
that  by  the  year  1914  (the  great  dividing  line  in  modern  history) 
the  idea  of  individual  labor-contracts  as  an  equitable  and  so- 
cially-defensible method  of  getting  labor  for  industry  had  be- 
come obsolete.  In  the  case  of  skilled  and  well-organized  trades 
it  had  been  voluntarily  displaced  by  collective  bargaining  of 
groups  of  employers  and  employed  devising  regular  and  elab- 

^By  J.  A.  Hobson.     The  Standard.     6:73-6.     November,   1919. 


2i6  Sl'.Ll'XTICD    ARTICLF.S 

orate  agreements  and  point  boards  for  adjustment  of  differences. 
In  tlie  case  of  more  backward  trades  the  notorions  failure  of 
indivichial  contract  to  secure  a  living  wage  and  other  recent  con- 
ditions of  employment  had  already  led  to  State  interference 
under  our  Trade  Boards  Act,  which  in  a  number  of  "sweated 
industries"  empowered  joint  boards,  representing  capital  and 
labor  with  uovcnnnental  assessors,  to  fix  minimum  wages. 
Unrest  ni  tliv  great  staple  industry  of  coal  mining  had  already 
i)efore  the  \\ar  led  to  the  establishment  under  goNcrnmental 
auspices  of  district  committees,  representing  operators  and  oper- 
atives in  the  mines,  for  regulation  of  wage  and  other  conditions, 
while  an  integral  part  of  the  agricultural  reform  policy  to  which 
Mr.  George  had  committed  the  Government,  included  the  fixing 
of  statutory  minimum  wages. 

Thus  in  all  parts  of  our  industrial  system  the  belief  in  and 
the  practice  of  individual  wage-contracts  were  rapidly  disappear- 
ing. The  criticisms  of  economists  and  employers  of  the  old 
individualist  school  were  met  by  pointing  out  that  the  system 
of  individual  bargaining  would  no  longer  work.  Humanitarian 
feeling  and  sound  civic  sense  condemned  it  as  oppressive, 
degrading,  and  socially  dangerous  in  the  weaker  trades,  while 
in  the  stronger  the  enforcement  by  organization  of  a  common 
rule  for  wages,  hours  and  other  conditions  appeared  indispen- 
sable if  industrial  peace  and  reliability  of  service  were  to  be 
secured.  In  great  modern  industry  the  talk  about  the  natural 
right  of  the  individual  firm  to  make  its  separate  bargain  with 
the  individual  worker  was  generally  regarded  as  futile,  having 
regard  to  the  fact  that  one  man's  labor  could  only  function  in 
close,  constant  co-operation  with  the  labor  of  hundreds  and 
thousands  of  other  workers.  This  large,  co-operative  basis  of 
production  demands  a  common  rule  for  pay,  hours  and  other 
conditions  which  is  utterly  unattainable  by  treating  individual 
workers  as  separate  free  bargainers.  This  elemental  truth  of 
the  modern  economic  system,  apparent  before  the  war,  has  been 
greatly  enforced  by  the  experience  of  war-industry  in  Britain. 

It  may  justly  be  said  that  in  Britain  a  whole  generation  of 
industrial  evolution  has  been  packed  into  these  five  crowded 
years  of  war  emergency.  Neither  capital  nor  labor  emerges 
from  the  war  as  it  entered.  In  both  a  new  level  of  organization 
and  combination  has  been  reached.  Before  the  war,  trusts  were 
still    regarded    as    distinctively    American,    cartels    as    German 


PROBLEA[S    OK    LABOR  217 

bodies.  It  was,  of  course,  known  lliat  fairly  effective  combines 
were  operating  in  Britain  as  elsewhere,  but  tliey  were  regarded 
as  exceptional  and  in  most  instances  our  free  import  policy  was 
considered  a  sufficient  security  against  monopolistic  oppression. 
But  during  the  war  the  processes  of  association  and  combination 
have  been  immensely  accelerated  in  most  of  our  essential  ui- 
dustries.  Not  only  were  such  services  as  railroads,  coal  mines, 
and  shipping,  engineering  in  its  main  branches,  taken  under  state 
control,  l)Ul  the  public  regulation  of  the  metal,  textile,  chemical, 
leather  and  other  essential  manufactures  was  such  as  to  compel 
business  which  formerly  had  worked  in  independent  competi- 
tion to  form  close  associations  for  materials,  costing  and  prices. 
After  the  war  was  over  this  enforced  association  could  not  dis- 
appear. Railroads  and  mines  could  not  return  to  the  era  of  free 
competition.  The  hold  which  government  still  retained  over 
many  supplies  of  raw  materials  and  over  prices  obliged  the 
manufacturers  to  look  closely  to  their  associations.  Even  when 
these  war-shortages  shall  have  passed  away,  there  is  no  proba- 
bility of  a  return  to  pre-war  competion.  Cartels  or  other  asso- 
ciations for  buying  and  selling,  trade  arrangements  for  the  regu- 
lation of  output,  distribution  of  markets,  and  the  fixing  of  profit- 
able prices  are  in  existence  or  in  proposition  everywhere  among 
our  great  manufacturing  industries. 

A  similar  stimulus  has  been  given  to  the  organization  of 
labor.  The  numbers  and  strength  of  the  great  Trade  Unions 
have  grown.  Some  five  millions  of  our  wage-earners  are  now 
unionized,  mostly  in  the  essential  industries.  Not  only  in  the 
advanced  trades,  such  as  cotton,  ship-building,  leather,  printing, 
but  in  many  of  the  relatively  backward  trades,  such  as  agricul- 
ture and  the  clothing  trades,  individual  bargaining  has  now  be- 
come impossible.  It  has  been  displaced  by  the  common  rule,  im- 
posed by  agreement  of  the  representatives  of  employers  and 
employed  throughout  the  trade,  and  enforced  in  some  instances 
by  legal  regulation. 

Although  these  methods  of  regulating  wages  and  other  con- 
ditions of  employment  by  collective  bargaining  are  far  from 
perfection,  they  are  recognized  as  a  distinct  advance  upon  the 
old  method  of  individual  wage-contract.  Doubtless  neither  com- 
plete economic  justice  nor  secure  industrial  peace  is  attainable 
by  collective  bargaining.  For  upon  this  plane  there  is  reached 
no  final  determination  of  a  "fair  wage"  or  a  "reasonable  price." 


2iS  SELECTED   ARTICLES 

The  relative  economic  force  of  the  two  parties  still  remains 
the  chief  determinant.  But  in  Britain  there  is  no  disposition  to 
go  back  to  the  individual  bargain  or  the  open  shop.  The  minds 
of  all  our  intelligent  employers  and  labor  leaders  are 
directed  towards  improving  and  perfecting  the  methods  of  col- 
lective bargaining,  so  as  to  bring  into  play  adequate  incentives 
tov.'ards  that  more  secure  and  more  productive  functioning  of 
industry  which  is  essential  to  industrial  peace  and  progress  in 
the  new  order  of  society. 

The  recommendatiojis  of  the  Whitley  Committee  in  favor 
of  establishing  Industrial  Councils  and  Workshop  Committees, 
equally  representative  of  capital  and  labor,  for  the  regular  dis- 
cussion and  settlement  of  all  matters  affecting  the  conditions  of 
employment  and  the  general  welfare  of  the  trade,  have  been 
generally  accepted  by  all  classes,  except  the  extremists  on  the 
"right"-  of  the  employers  and  the  "left"  of  the  workers.  The 
idea  is  to  introduce,  alike  into  the  national  trade,  the  several 
industries  and  their  constituent  establishments,  a  genuine  form 
of  representative  government,  in  which  capital  and  labor  should 
have  an  equal  share.  This  is  the  first  full  recognition  that 
labor  is  no  longer  to  be  treated  as  a  mere  commodity,  but  that 
it  is  entitled  to  a  large  participation  in  the  control  of  the  con- 
ditions under  which  it  functions  for  the  service  of  society. 

To  Socialists  and  to  a  section  of  our  new  Guild  Socialists, 
these  joint  committees,  adopted  by  many  of  our  trades  and  ac- 
cepted by  several  branches  of  our  public  services,  appear  to  be 
unsatisfactory  compromises,  designed  to  buy  off  more  revolu- 
tionary changes.  And  it  is  not  difficult  to  show  that,  if  the 
capital  and  labor  engaged  in  certain  fundamental  industries 
were  brought  into  close  combination  and  were  left  in  full  con- 
trol of  selling  prices,  they  might  establish  a  most  dangerous 
oppression  over  the  consuming  public.  For  it  is  not  yet  suffi- 
ciently realized  that  the  market,  or  consuming  public,  is  an  in- 
tegral part  of  every  industry,  and  needs  adequate  representation 
in  the  control  of  that  industry,  so  far  as  output,  quality  of  ser- 
vices and  prices  are  concerned. 

There  are  also  other  defects  in  the  joint  committee,  regarded 
as  a  final  method  of  industrial  peace.  But  the  real  significance 
of  the  experiment  consists  in  the  fact  that  it  rests  upon  the 
definite  repudiation  of  the  free  individual  labor  contract.  It 
formally  presumes  at  each  stage  in  its  operation  the  existence 
of  associations  of  employers  on  the  one   side,  workers  on  the 


PROBLEMS    OF   LABOR  219 

other,  and  regards  the  decisions  made  by  agreement  of  their 
representatives  as  the  accepted  rules  for  the  working  of  the 
whole  establishment  or  trade.  The  adoption  of  such  represen- 
tative councils  would  be  a  practical,  though  not  a  legal,  com- 
pulsion, both  on  employers  and  workers  to  take  up  member- 
ship of  their  Association  or  Trade  Union,  in  order  to  take  part 
in  forming  and  administering  the  common  rules  of  the  trade. 
This  IS  the  new  level  of  conscious  combination  and  repre- 
sentation which  has  been  reached  in  Britain,  and  which  is  gen- 
erally accepted  as  the  minimum  concession  to  the  demand  of 
labor  for  an  etiective  voice  in  determining  the  conditions  of  its 
employment.  The  old  insistence  of  the  capitalist-employer,  that 
he  would  brook  no  interference  with  his  absolute  right  to  run 
his  business  as  he  thought  fit,  and  buy  his  labor  by  separate 
agreement  in  a  free  labor  market  at  any  price  for  which  he 
could  obtain  it,  has  virtually  disappeared.  It  is  recognized  as 
impracticable  and  out  of  accord  with  the  new  conception  of  in- 
dustries as  social  services.  For  this  lesson  of  the  social  mean- 
ing of  an  industry,  our  war-experience  has  surely  taught.  Dur- 
ing the  war  it  was  thought  and  felt  by  the  nation  that  the  busi- 
ness of  employer  and  worker  in  the  mines  and  shipyards  was 
to  turn  out  coal  and  ships,  not  to  make  dividends  or  wages, 
and  that  the  farmer's  business  was  to  use  his  land  so  as  to  pro- 
duce the  largest  quantity  of  food.  I'nderneath  all  the  greedy 
profiteering,  this  general  sense  that  an  industry  was  a  social 
service  and  that  the  life  of  the  nation  depended  on  its  efficient 
operation  obtained  powerful  recognition.  Some  of  this  genuinely 
humanist  conception  of  industry  has  survived.  The  conception 
of  trade  as  a  competitive  struggle  between  rival  businesses,  and 
of  a  business  as  a  private  profiteering  instrument,  which  bought 
its  labor  as  it  bought  its  raw  materials  or  its  fuel,  is  no  longer 
possible.  Businesses  are  not  going  to  continue  the  waste  of  a 
cutthroat  competition.  They  are  going  to  combine.  Labor  is 
no  longer  going  to  sell  itself  in  hourly  or  w^eekly  units  of  the 
individual  worker,  but  in  long-period  collective  flows  under 
regulations  of  price  and  hours  and  hygiene  which  shall  check 
the  inhuman  encroachments  of  the  machine,  and  win  for  the 
people  in  their  capacity  of  producers,  consumers  and  citizens 
the  fruits  of  human  industr.v.  The  fact  that  war-conditions 
have  left  a  heavy  legacy  of  suspicion  and  class-hate  and  have 
by  a  natural  suggestion  turned  the  belief  in  force  as  a  remedy 
from    the    international   into    the    intestinal    struggle,    must    not 


220  s1':lrcti-:d  articlics 

blind  Ub  to  the  importance  of  the  new  experiments  in  the  co- 
operation of  industrial  factors  or  lead  us  to  a  premature  dis- 
missal of  these  experiments  in  industrial  democracy. 


COLLECTRT.  BARGAINING  IN  THE  GLASS 
BOTTLE  INDUSTRY ' 

The  agreement  between  the  Glass  Bottle  Blowers'  Associa- 
tion and  the  National  Glass  Vial  lind  Bottle  Manufacturers' 
Association  furnishes  an  impressive  and  an  instructive  exhibit 
of  the  feasibility  of  carrying  on  for  a  long  term  of  years  a 
peaceful  and  mutually  agreeable  system  of  collective  bargain- 
ing. While  friction  between  the  parties  to  the  agreement  has 
at  times  been  great  and  while  the  agreement  has  often  been 
almost  at  the  breaking  point,  yet  so  enlightened  has  been  the 
policy  of  the  representatives  of  botli  the  union  and  the  manu- 
facturers' association  in  granting  concessions  and  in  yielding 
upon  disputed  points,  that  the  agreement  has  operated,  in  one 
form  or  another,  for  almost  a  quarter  of  a  century.  Nor  have 
external  conditions  l)ecn  particularly  favorable  to  the  continued 
life  of  the  agreement.  The  technical  revolution  of  the  industry, 
beginning  in  the  middle  nineties  with  the  installation  of  the  so- 
called  '"semi-automatic"  machine  and  intensified  after  1900  by 
the  invention  and  the  later  extensive  use  of  the  Owens  auto- 
matic machine  for  the  manufacture  of  glass  bottles,  has  pre- 
sented to  the  conferences  of  the  manufactures  and  their  em- 
ployees problems  that  every  year  become  more  perplexing  and 
more  difficult  of  solution.  The  promulgation  of  working  rules 
to  govern  those  members  of  the  union  who  were  employed  on 
the  semi-automatic  machines,  the  regulation  of  the  wage  scale 
so  as  to  retain  a  fair  wage  for  the  glass  blower  and  at  the 
same  time  to  permit  tlic  employer  of  hand  blowers  to  compete 
against  the  machine,  and  finally  a  new  adjustment  of  wage 
scales  designed  to  meet  the  competition  of  the  automatic,  are 
a  few  of  the  problems  which  have  received  at  the  hands  of  the 
aimual  conference,  if  not  a  perfect  solution,  at  least  a  workable 
settlement. 

'By  Leo  Wolman.  American  Economic  Review.  6:550-67.  Septem- 
ber 19 1 6.  The  material  presented  in  this  paper  was  collected  by  the 
%vnter  while  an  agent  of  the  United  States  Commission  on  Industrial  Rela- 
tions. 


PROBLEMS    OF    LABOR  221 

History  and  General  Description  of  the  Agreement 

The  glass  bottle  blowers  were  organized  originally  not  in 
one  national  organization  but  in  the  separate  and  independent 
Eastern  and  Western  Leagues  of  Green  Glass  Bottle  Blowers. 
In  1886  the  Western  League  became  affiliated  with  the  Knights 
of  Labor  as  District  Assembly  143  of  that  organization  and  in 
the  same  year  the  Eastern  League  was  affiliated  as  District 
Assembly  149.  As  early  as  1886,  also,  there  is  record  of  annual 
conferences  between  the  Eastern  and  Western  Leagues  of 
blowers  and  of  loosely  organized  associations  of  Eastern  and 
Western  bottle  manufacturers.  The  fact,  however,  that  the  or- 
ganizations in  these  two  sections  of  the  country  often  worked  at 
cross  purposes  and  that  concessions  from  the  one  would  at  times 
be  used  to  force  similar  concessions  from  the  other,  coupled 
with  the  fact  that  the  frequent  passage  of  journeymen  blowers 
from  district  to  district  made  the  disciplining  of  their  member- 
ship difficult,  soon  led  to  a  movement  to  amalgamate  the  West- 
ern and  Eastern  Leagues  of  Glass  Bottle  Blowers  into  one  na- 
tional organization. 

In  1890,  accordingl}-,  the  Eastern  and  Western  Leagues 
united  in  one  body  under  the  title  of  the  National  Trade  As- 
sembly 143,  Knights  of  Labor  of  America.  And  in  July,  1891, 
the  assembly  withdrew  from  the  Knights  of  Labor  to  become 
the  Green  Glass  Bottle  Blowers'  Association  of  the  United 
States  and  Canada.  With  the  formation,  then,  of  the  national 
organization  of  glass  bottle  blowers  in  1890,  the  sectional  con- 
ferences of  preceding  years  were  succeeded  by  national  confer- 
ences between  representatives  of  the  union  and  of  the  manu- 
facturers. 

During  the  first  few  years  following  the  amalgamation,  evi- 
dence of  the  conflicting  interests  of  the  Western  and  Eastern 
manufacturers  could  still  be  found.  Thus,  at  the  conference  of 
1890,  although  an  agreement  could  have  been  effected  with  the 
Western  manufacturers,  the  chairman  of  the  conference  stated 
that  he  could  not  promise  that  the  Eastern  manufacturers  would 
be  bound  by  the  findings  of  the  conference.  Later,  the  Eastern 
manufacturer.s  actually  withdrew  from  the  conference.  Indeed, 
it  was  at  that  time  the  opinion  of  the  officers  of  the  union  that 
the  "Eastern  and  Western  manufacturers  were  evidently  trying 
to  effect  a  settlement  independently  of  each  other  to  create  dis- 
content" in  the  ranks  of  the  union.     But  since  the  union  would 


222  SELECTED   ARTICLES 

treat  only  with  a  joint  committee  representing  the  manufac- 
tmers  from  both  sections  of  the  country,  the  manufacturers 
were  unsuccessful  in  their  efforts  to  revert  to  the  earHer  sectional 
conferences.  With  the  gradual  development  of  the  machinery  of 
the  conferences  and  with  the  growth  in  mutual  confidence  of 
the  parties  to  the  conferences,  the  conflicting  interests  of  the 
different  sections  became  less  pressing  and  the  manufacturers' 
association  developed  into  a  more  compact  and  more  homo- 
geneous organization. 

Prior  to  1899  it  had  been  customary  to  hold  annually  one 
wage  conference  either  in  the  month  of  July  or  August,  usually 
several  weeks  after  the  union  and  the  manufacturers'  associa- 
tion had  held  their  annual  conventions.  But  this  system  was 
soon  found  to  be  open  to  serious  objections.  A  single  aimual 
conference  at  which  were  submitted  by  the  conferees  demands 
and  counterdemands  whose  purport  was  known  only  to  their 
sponsors  precluded,  in  the  judgment  of  both  the  manufacturers 
and  their  employees,  that  familiarity  with  the  propositions  which 
is  essential  to  their  intelligent  consideration.  The  plan  was 
therefore  adopted  of  holding  a  preliminarj-  conference  in  May 
at  which  would  be  submitted  the  demands  of  both  parties. 
Those  questions  upon  which  there  was  little  disagreement  would 
be  settled  at  this  preliminary  conference.  The  more  debatable 
propositions  would  next  revert  to  the  annual  conventions  of  both 
associations  for  further  discussion  and  would  then  in  July  or 
August  be  submitted  to  the  final  conference  for  final  disposition. 

The  value  of  such  a  preliminary  conference  was  at  once  ob- 
served. President  Hayes  of  the  Glass  Bottle  Blowers'  Associa- 
tion writes  in  1900: 

The  amount  of  work  done  at  the  May  conference  this  year  in  the  way 
of  listing  bottles  and  discussing  important  questions  proves  that  this  pre- 
liminary meeting  of  the  wage  committees  has  become  a  vital  neccsi^ity, 
unless,  indeed,  we  are  desirous  of  a  protracted  wage  conference  later  on. 
or  possibly  two  or  three  separate  ones,  which  may  be  prolonged  to  such 
an  extent  as  to  delay  or  hamper  the  beginning  of  work  in  the  fall.  At  the 
May  meeting  we  hear  the  manufacturers'  side  of  the  story,  and  are,  there- 
fore enabled  to  lay  it  before  the  convention  for  discussion  and  counsel. 
This  is  right  and  proper,  as  it  is  a  matter  of  duty  for  us  to  view  all  ques- 
tions from  both  sides,  and  it  would  be  neither  just  nor  safe  for  us  to 
legislate  with  only  a  one-sided  knowledge  of  matters  upon  which  the  trade 
depends  so  much  for  successful  operation. 

With  the  establishment  and  successful  operation  of  the  pre- 
liminary conference,  elaborate  rules,  regulating  the  conduct  of 
the  preliminary  and  final  conferences,  were  formulated.  Of  the 
rules  regulating  both  conferences,  the  most  important  were  (l) 
the  rule  providing  that  no  question  which  had  not  been  brought 


PROBLEMS   OF   LABOR  223 

before  the  preliminary  conference  would  be  considered  at  the 
final  conference  and  (2)  the  provision  for  the  submission  of 
questions  by  the  parties  to  the  conference.* 

The  agreements  made  before  1902  laid  down  the  working 
rules  and  price  lists  for  each  year  but  made  no  provision  for 
the  adjustment  of  questions  arising  between  the  annual  confer- 
ences. There  was,  to  be  sure,  the  rule  stating  that  "all  ware 
not  specified  in  the  list  shall  be  rated  at  the  same  price  and  sub- 
ject to  the  same  rules,  in  regard  to  weight,  as  those  specified  in 
the  list  which  they  resemble  in  size,  shape,  weight,  and  finish." 

This  clause  did  not,  however,  specify  who  was  to  settle  dis- 
putes arising  from  disagreements  in  assigning  new  bottles  to 
various  brackets,  nor  upon  whom  was  to  devolve  the  duty  of  in- 
terpreting the  many  rules  included  in  the  annual  agreements. 
This  link  in  the  agreement  was  supplied  at  the  conference  in 
1902.  At  the  suggestion  of  the  manufacturers,  the  President  of 
the  Blowers'  Association  was  chosen  as  the  officer  to  whom  "all 
information  wanted  in  regard  to  the  intent  or  meaning  of  rules 
and  regulations  shall  be  referred."  It  was  further  provided  that 
his  decision  was  binding  until  reported  to  and  revised  by  the 
joint  conference. 

As  in  the  case  of  all  matters  included  in  the  annual  agree- 
ments between  the  bottle  blowers'  union  and  the  bottle  manu- 
facturers, the  rules  providing  a  mechanism  for  the  adjustment 
of  disputes  arising  between  the  final  conference  of  one  j^ear  and 
the  preliminary  conference  of  the  succeeding  year  have  since 
1902  undergone  some  modification  and  considerable  amplification 
and  exist  at  present  in  the  following  form : 

All  information  wanted  in  regard  to  the  intention  or  meaning  of  the 
rules,  regulations  and  prices  shall  be  referred  to  the  President  of  the 
Blowers'  Organization,  whose  decision  in  all  such  cases  shall  be  binding 
unless  said  decision  is  reversed  by  the  Joint  Wage  Preliminary  Conference 
in  the  case  of  a  protest. 

Manufacturers  who  desire  to  protest  against  a  decision  of  the  President 
shall  serve  notice  in  writing  on  the  Branch  in  their  locality  of  their  inten- 
tions to  protest,  and  shall  also  notify  the  President  of  both  the  Manufac 
turers'  and  Blowers'  organizations  of  the  protest;  this  notice  shall  contain 
all  information  necessary  for  a  proper  review  of  the  case  protested.  Said 
notice  shall  be  served  not  later  than  thirty  days  prior  to  the  first  day  of 
the  Preliminary  Conference. 

1  The  manner  in  which  Cll•.t•stion^  are  submitted  to  the  conference  is 
described  in  the  following  clause  of  the  agreement:  "Manufacturers  and 
branches  shall  notify  each  other  of  all  bottles  or  changes  intended  to  be 
submitted  to  the  May  conference,  and  the  reason  for  so  submitting  them, 
which  notice  shall  be  in  writing.  The  branches  shall  send  such  written 
notices  to  the  President  of  the  Glass  Bottle  Blowers'  Association  and  the 
manufacturers  shall  send  their  written  notices  to  the  President  of  the 
National  Vial  and  Bottle  Manufacturers'  Association."  (Wage  Scale  and 
Working  Rules — Glass  Bottle  Blozvers'  Association.  Blast,  1914-1915,  sees. 
42-44.) 


224  SELECTJ'ID    ARTICLES 

Protests  on  decisions  made  between  April  ist  and  July  3i9t  shall  be 
reviewed  at  the  Final  Conference  with  notice  as  above  stated  to  be  served 
no  later  than  August    ist. 

No  case  in  protest  shall  be  reviewed  by  either  conference  unless  the 
foregoing   has   been    fully   compiled   with  ' 

Originally,  when  a  clear  line  of  demarcation  existed  between 
the  flint  glass  bottle  workers  and  the  green  glass  bottle  makers, 
the  union  of  green  glass  bottle  makers,  the  parent  organization 
of  the  present  Glass  Bottle  Blowers'  Association,  held  wage  con- 
ferences with  the  association  of  green  glass  bottle  manufactur- 
ers. Later,  however,  with  the  introduction  of  the  tank  and  the 
extension  of  its  jurisdiction  over  all  bottle  makers  whether 
blowing  bottles  from  tanks  or  covered  pots,  the  union  held  sep- 
arate conferences  with  the  green  glass  and  with  covered-pot 
manufacturers.  At  the  conference  of  the  representatives  of  the 
imion  with  the  representatives  of  the  Flint  Bottle  Manufactur- 
ers' Association  for  the  pvu-pose  of  fixing  prices  and  rules  to 
govern  the  manufacture  of  covered-pot  ware  for  the  season  of 
1902-1903,  the  chairman  of  the  conference,  a  manufacturer, 
stated  "that  in  his  opinion  all  matters  pertaining  to  the  making 
of  bottles  should  be  settled  by  one  committee,  but  that  while  the 
blowers  were  practically  all  in  one  association,  the  manufacturers 
were  unfortunately  divided  into  two,  hence"  the  necessity  for 
two  conferences.  In  the  following  year,  therefore,  the  scope  of 
the  manufacturers'  organization  was  widened,  to  include  all  per- 
sons engaged  in  the  manufacture  of  glass  bottles;  and  a  sub- 
committee was  thereafter  annually  appointed  to  consider  ques- 
tions that  might  arise  between  the  covered-pot  manufacturers 
and  their  employees.  Now  that  the  manufacturers  of  covered- 
pot  ware  have  been  admitted  into  the  employers'  association,  the 
Glass  Bottle  Blowers'  Association  holds  annually  a  preliminary 
and  a  final  conference  with  the  representatives  of  one  maiui- 
facturers'  association,  the  National  Glass  Vial  and  Bottle  Alanu- 
facturers'  Association.  At  these  conferences  there  are  drawn 
four  distinct  sets  of  price  scales  and  working  rules.  (a)  One 
governs  the  manufacturers  and  employees  engaged  in  the  hand 
manufacture  of  glass  from  the  lank;  (b)  another  governs  the 
manufacture  of  covered-pot  ware;  (c)  a  third  relates  to  rates 
and  rules  for  the  semi-automatic  machine  in  the  manufacture  of 
wide-mouth  ware;  and  the  last  (d)  constitutes  the  wage  scale 
and  working  rules  governing  the  "United  and  the  O'Neill  and 
the  one  and  two  man  narrow-mouth  machines." 

'  Wage    Scale    and    JVcrktng    RiiLs — Glass   Bottle   Bloivos'    Association. 
Blast    1914-1915,  sec.   45. 


PROBLEMS    OF    LABOR  225 

The  essential  features,  then,  of  the  agreement  between  the 
Glass  Bottle  Blowers'  Association  and  the  National  Bottle  Manu- 
facturers' Association  arc : 

a.  The  provision  for  annual  preliminary  and  final  confer- 
ences for  the  discussion  and  settlement  of  working  rules  and 
wage  rates. 

b.  The  machinery  for  the  settlement  of  disputes  arising  be- 
tween the  conferences  and  for  the  review  of  these  settlements. 

t".  The  promulgation  of  price  lists  and  working  rules  for  the 
four  divisions  of  the  industry:  the  tank,  covered-pot,  semi-auto- 
matic wide-mouth,  and  semi-automatic  narrow-mouth  ware. 

Tlie  Employers'  Association 

The  National  Glass  Vial  and  Bottle  Manufacturers'  Associa- 
tion existed  before  1890  as  the  Western  and  Eastern  Associa- 
tions of  Green  Glass  Bottle  Manufacturers.  These  associations 
were  loosely  organized  bodies  that  existed  principally  for  the 
purpose  of  holding  wage  conferences  with  the  Eastern  and 
Western  Leagues  of  Green  Glass  Bottle  Blowers.  With  the 
amalgamation  of  those  organizations  in  1890  the  manufacturers 
effected  a  somewhat  similar  combination  which  apparently  con- 
fined itself  to  the  selection  of  representatives  to  the  annual 
national  wage  conferences  with  the  LInited  Green  Glass  Bottle 
Blowers'  Association.  Later,  upon  the  absorption  by  the  Glass 
Bottle  Blowers'  Union  of  all  branches  of  the  trade,  the  employ- 
ers' association  similarly  extended  its  jurisdiction.  In  the  con- 
stitution revised  and  amended  in  1902,  it  is  stated  that  the  asso- 
ciation admits  into  membership  "any  person  who  manufactures 
glass  vials  and  bottles  in  tanks  or  open  pots  and  emplo3-s  work- 
men under  the  jurisdiction  of  the  Glass  Bottle  Blowers'  Associa- 
tion." An  amendment  to  the  constitution  is  now  pending  which 
would  admit  into  membership  "any  person  who  manufactures 
glass  bottles  and  jars,  cither  from  tanks  or  from  open  or  cov- 
ered pots." 

The  officers  of  the  organization  consist  of  president,  vice- 
president,  secretary,  and  treasurer  elected  annually  by  ballot  and 
of  an  executive  committee  appointed  annually  by  the  president 
This  committee,  together  with  the  officers  of  the  organization, 
constitute  the  representatives  of  the  association  at  the  annual 
conferences.  Meetings  of  the  association  are  held  annually  be- 
tween the  preliminary  and  final  joint  wage  conferences  and  arc 
occupied  almost  exclusively  with  the  discussion  of  issues  raised 
in  the  preliminary  conference. 


226  SELECTED   ARTICLES 

The  association  practically  restricts  its  activities  to  those  of 
collective  bargaining.     The   object  of   the  association   has  been 

to  increase  the  mutual  acquaintance  of  all  persons  engaged  in  the  manu- 
facture of  vials  and  bottles;  to  exchange  views  on  the  various  subjects 
that  are  of  general  interest;  to  look  after  any  tariff  legislation  affecting 
the  welfare  of  the  business;  to  attend  as  far  as  possible  to  any  changes 
or  discriminations  in  the  classifications  made  by  railroads  on  the  line  of 
goods  manufactured  and  handled  by  the  association;  to  meet  with  the 
Blowers'  Executive  Board  as  often  as  may  be  necessary  each  year  to  fix  a 
uniform  scale  of  wages  for  blowing  the  various  kinds  of  vials  and  bottles 
manufactured  for  the  trade;  to  establish  rules  and  regulations  for  the 
government  of  all  factories  throughout  the  United  States  and  Canada;   .  .  . 

Although  provision  is  made  for  tariff  and  railroad  committees, 
the  organization  has  shown  little  activity  in  this  direction. 

The  relations  of  the  association  and  the  Glass  Bottle  Blow- 
ers' Union  have  on  several  occasions  been  almost  at  the  breaking 
point  and  several  of  the  conferences  have  adjourned  without 
reaching  an  agreement.  The  organization,  however,  has  never 
become  a  hostile  association  and  no  record  is  extant  of  its  having 
sanctioned,  as  an  association,  even  isolated  acts  of  hostility 
toward  the  blowers'  organization.  In  a  few  cases,  to  be  sure,  it 
has  been  unable  to  prevent  members  from  violating  the  agree- 
ment; persistent  violation  would,  however,  result  in  the  expulsion 
of  the  member  from  the  association. 

The  association  has  never  adopted  any  system  of  fines  for 
the  discipliining  of  its  members  either  for  the  violation  of  edicts 
of  the  association  or  of  the  terms  of  the  joint  agreements.  Nor 
did  it  have  until  recently  any  settled  policy  toward  tlie  union 
manufacturers  not  members  of  the  association.  For  some  time, 
such  manufacturers  were  permitted  to  attend  the  conferences,  to 
submit  propositions,  and  to  request  reviews  of  the  decisions  of 
the  president  of  the  blowers'  association.  At  the  final  conference 
in  1913,  however,  it  was  announced  that  the  following  resolutions 
had  been  adopted  by  the  National  Vial  and  Bottle  Manufactur- 
ers' Association  : 

Whereas,  There  are  a  number  of  Bottle  and  Jar  manufacturers  through- 
out the  United  States  and  Canada,  employing  members  of  the  Glass  Bottle 
Blowers'  Association  who  have  heretofore  received  practically  all  the 
benefits  derived  from  the  action  of  the  Joint  Wage  Conference,  without 
becoming  members  of  the  National  Vial  and  Bottle  Manufacturers'  A.=so- 
ciation,  or  without  contributing  towards  paying  the  necessary  expenses 
connected  therewith.  Some  have  declared  they  would  get  along  better 
without  the  association  or  without  a  Joint  Wage  Conference.  Others  de- 
clare there  is  nothing  to  be  gained  by  membership  in  the  organization  so 
long  as  they  are  able  to  obtain  the  benefits  therefrom  without  sharing  in 
the  expenses,  and  by  not  being  members  they  argue  that  they  are  not 
bound  by  the  action  of  the  Joint  Wage  Conference,  yet  they  gladly  accept 
.Tud  make  use  of  all  decisions  of  said  conference  that  pleases  them,  tlun- 
fore   be  it  . 

Resolved:  That  the  members  of  our  Executive  Committee  vvhen  in 
conference   with    the    workmen's    committee,   be    and   are   hereby    instructed 


PROBLEMS    OF   LABOR  227 

to  decline  hereafter  to  consider  any  disputes,  grievances,  etc.,  or  the  listing 
of  bottles,  their  prices  or  classifications  or  any  other  matters  arising  in  a 
factory  the  management  of  which  is  in  no  way  afiiliated  with  the  National 
Vial  and  Bottle  Manufacturers'  Association  that  may  come  before  the 
Joint  Conference  either  directly  or  indirectly,  thus  leaving  all  such  mat- 
ters to  be  decided  by  the  President  of  the  Glass  Bottle  Blowers'  Associa- 
tion, whose  decisions  shall  be  final  in  so  far  as  they  pertain  to  the  par- 
ticular factory,  but  any  decision  he  shall  make  in  such  cases  shall  not  be 
construed  as  establishing  a  precedent,  nor  shall  it  be  applied  to  or  be  bind- 
ing upon  other  factories,  but  it  is  understood  that  any  decision  thus  ren- 
dered, shall  upon  application  by  any  member  of  this  association,  be  sub- 
ject to   review  by  the  Joint   Wage  Conference. 

These  resolutions  for  a  time  nonplussed  the  representatives 
of  the  union.  "While  this  was  a  rather  extraordinarj^  proceed- 
ing," writes  the  secretary  of  the  blowers'  association  concerning 
these  resolutions,  "still  we  could  not  but  agree  with  them  in 
their  contentions.  Our  association  will,  therefore,  exercise  its 
best  judgment  in  dealing  with  those  who  do  not  belong  to  the 
above-mentioned  association,  dealing  as  we  have  always  done, 
fairly  and  impartial^  with  all."  The  net  efifect  of  this  action  of 
the  employers'  association  is  to  leave  the  independent  union  man- 
ufacturers in  almost  the  same  condition  as  before.  They  are 
granted  by  the  union  the  saine  working  conditions  and  the  same 
prices  as  operate  in  the  establishments  of  those  manufacturers 
belonging  to  the  organization.  There  is  this  difference,  how- 
ever, the  independent  manufacturers  have  no  organization  to 
which  they  can  appeal  for  a  review  of  the  decisions  of  the  presi- 
dent of  the  blowers'  union. 

The  skilled  branch  of  the  glass  bottle  industry  is  about  90  per 
cent  organized.  During  the  nineties  and  the  earh'  part  of  the  last 
decade  strong  non-union  centers  were  to  be  found  in  New  Jer- 
sey, western  Penns3-lvania,  and  Indiana.  Vigorous  organizing 
campaigns  by  the  union  resulted  in  the  organization  of  many  of 
the  non-union  plants;  until  today  a  high  degree  of  organization 
has  been  reached.  To  a  considerable  extent,  however,  non- 
unionism  still  flourishes  in  the  gas  belt  of  Indiana  and  in 
Western  Pennsylvania.  Of  the  union  manufacturers,  the  ma- 
jority are  members  of  the  employers'  association;  and  the  resolu- 
tion adopted  in  1913  resulted  in  the  entrance  of  about  thirty-five 
independent  manufacturers.  Those  who  still  rcinain  without  the 
association  feel  that  the  benefits  to  be  gained  are  not  worth  the 
expense  of  membership,  inasmuch  as  they  receive  the  same  terms 
from  the  union  as  do  those  manufacturers  belonging  to  the  asso- 
ciation. It  has  also  been  said  that  a  number  of  these  independent 
manufacturers  join  the  association  when  they  have  grievances  to 
be  considered  and  withdraw  when  their  grievances  are  passed 
upon  and  adjusted. 


228  SELECTED   ARTICLES 

The  Making  of  the  Agreement 

Unlike  those  national  agreements  which  provide  only  the 
machinery  for  the  settlement  of  disputes  and  which  leave  to  the 
local  unions  the  formulation  of  working  rules  and,  in  some  cases, 
wage  rates,  this  agreement  fixes  in  detail  practically  all  of  the 
conditions  of  employment  of  the  glass  bottle  makers.  The  local 
unions  can  legislate  only  upon  such  matters  as  are  concerned 
with  the  internal  government  of  the  union.  When,  however, 
some  unforeseen  question  arises  during  the  year,  an  attempt  is 
first  made  to  settle  the  matter  in  conference  between  the  factory 
committee  '  and  the  employer,  and  if  they  are  unable  to  arrive 
at  an  agreement,  the  question  is  referred  to  the  president  of  the 
union. 

All  questions  relating  to  prices  and  rules,  which  are  not  set- 
tled to  the  satisfaction  of  both  parties  during  the  year,  and  those 
matters,  already  in  the  agreement,  which  one  or  the  other  parties 
wishes  to  have  amended,  arc  considered  at  the  May  preliminary 
conference.  The  questions  not  settled  at  this  conference  and 
those  arising  between  the  preliminary  and  final  conferences  re- 
ceive consideration  at  the  latter  conference.  Tlie  matters  upon 
which  adjudication  is  desired  are  usually  submitted  to  the  con- 
ferences in  the  form  of  resolutions  from  local  unions  or  of  re- 
quests from  individual  manufacturers;  but  all  of  such  resolu- 
tions and  requests  must  conform  to  the  modus  operandi  de- 
scribed earlier  in  this  paper. 

The  members  of  the  executive  board  of  the  (ilass  Bottle 
Blowers'  Association  act  as  the  representatives  of  the  union  at 
the  conference.  These  members  arc  elected  annually  at  the  con- 
vention of  their  organization  and  hold  office,  therefore,  only  for 
one  year.  Although  the  acts  of  the  i-epresentatives  of  the  union 
thus  frequently  become  the  subject  of  review  by  their  constitu- 
ents, the  union  conferees  have  throughout  the  conference  deliates 
shown  unusual  independence  of  judgment.  That,  however,  their 
conduct  has  reflected  the  mature  opinions  of  the  majority  of 
the  union  is  attested  by  the  fact  that  many  of  the  meml)ers  of 
the  executive  Ijoard  have  been  reelected  over  a  number  of  year?. 
Indeed,  the  president  of  the  association,  an  ex-officio  member 
of  the  board  has  now  held  that  position  for  almost  twenty 
years. 

The   representatives  of   the   imioii   have    full   power   to   settle 

'  The  factory  coinniittee  is  a  committee  of  workmen  in  a  shop  chosen 
by  the  employees  in  that  shop  to  represent  them  in  conferences  with  the 
employer. 


PROBLEMS    OF    LABO.v  229 

questions  without  referring  the  matter  back  to  their  organization. 
Nor  do  they  go  to  the  conferences  instructed  to  take  one  stand 
or  another.  Attempts  have,  to  be  sure,  been  made  from  time  to 
time  to  instruct  the  representatives  to  follow  out  a  certain  line 
of  action  or  to  strip  them  of  the  authority  to  settle  the  more 
important  questions  arising  at  the  conference.  These  attempts 
have,  however,  alwaj's  been  met  by  the  concerted  opposition  of 
the  officers  and  of  the  majorit}'  of  the  membership.  Thus,  early 
in  the  history  of  the  agreements  resolutions  were  introduced  at 
a  convention  removing  the  power  from  the  conferees  to  settle 
anything  relating  to  price  lists,  apprentice  laws,  or  market  money. 
These  resolutions  were  received  with  the  following  comment 
from  the  president  of  the  union : 

To  adopt  the  amendment  would  simply  deprive  your  officers  of  all 
executive  power  and  make  them  mere  figure-heads  to  represent  the  or- 
ganization. Take  away  the  power  to  concede  or  alter  anything  in  the  price 
list,  apprentice  law  or  market  money  and  you  leave  nothing  of  any  im- 
portance on  which  to  treat  with  the  manufacturers'  wage  committee.  No 
committee  of  manufacturers  would  meet  your  committee  unless  it  had  full 
power  to  act  and  bind  the  association  and  if  this  convention  takes  this 
power  from  them,  it  would  be  more  sensible  to  put  your  demands  on  paper 
and  send  them  by  post  saying  that  such  is  the  will  of  the  conventions  than 
to  send  your  representatives  there  merely  to  state  it.  This  convention  does 
not  represent  all  the  glass  trade,  only  the  working  portion  of  it.  Your 
employers  represent  the  other  portion.  They  also  have  an  association  and 
appoint  a  committee  to  present  their  demands  in  conference.  If  they 
adopt  the  same  principle  as  is  embodied  in  this  resolution  or  amendment 
giving  their  committee  no  power  to  act  on  the  main  questions,  do  you  for 
a  moment  think  a  settlement  would  ever  be  effected?  No  man  with  any 
self  respect  could  accept  office  under  such  restrictions. 

Again  in  1906  the  attempt  was  made  to  instruct  the  repre- 
sentatives of  the  union  on  a  definite  proposition.  Here,  too,  the 
attempt  was  unsuccessful.  In  this  case,  the  resolution  providing 
that  the  "30th  annual  convention  instruct  our  President  and 
Executive  Board  to  entertain  no  proposition  for  reduction  in 
wages  the  coming  season"  was  replaced  b}'  the  resolution  "that 
it  is  the  sense  of  the  convention  that  we  do  not  deem  it  advisable 
to  accept  a  reduction  for  the  coming  season." 

The  members  of  the  executive  board  of  the  manufacturers' 
association  are  similarly  the  representatives  of  that  organization 
at  the  annual  wage  conferences.  Instead,  however,  of  being 
elected  annually  bj'  the  convention  the}'  are  appointed  annually 
I)y  the  president  of  the  organization.  Like  the  union  conferees, 
they  are  sent  to  the  conferences  uninstrncted.  But  here,  as  in 
the  case  of  the  union,  dissatisfaction  with  the  work  of  their 
representatives  has  at  times  been  expressed  by  manufacturers. 
These  objections  have  arisen  generally  from  two  sources.  In 
the  first  place,  the  manufacturers  of  hand-made  ware  have  long 
protested  that  their  representation  upon  the  wage  committee  has 


230  SELECTED   ARTICLES 

been  inadequate  and  that  all  legislation  is  framed  to  benefit  the 
machine  manufacturers  at  their  expense.  Accordingly,  in  igi2 
a  number  of  the  hand  manufacturers  withdrew  from  the  annual 
conferences  on  the  ground  that  those  conferences  were  "domin- 
ated by  the  machine  manufacturers  and  we  do  not  care  to  have 
the  machine  manufacturers  adjust  the  wages  for  the  hand 
blown."  The  other  protest  arises  from  those  manufacturers  who 
feel  that  their  executive  committee  has  not  presented  the  case  of 
the  manufacturers  as  vigorously  as  it  might,  nor  has  it  been  in- 
sistent enough  in  pressing  their  demands.  From  these  feelings 
grew  out  the  request  that  the  president  appoint,  in  addition  to 
the  usual  committee,  two  alternates  to  be  selected  "from  the 
twenty  or  more  members  who  have  protested  present  conditions" 
with  the  power  to  attend  the  wage  conference. 

At  the  preliminary  conference  of  1914  a  number  of  manu- 
facturers and  members  of  the  National  Bottle  Manufacturers' 
Association  "asked  permission  to  confer  with  the  members  of 
the  committee  representing  the  manufacturers  and  desired  to  be 
heard  concerning  matters  in  which  they  were  interested."  Their 
request  was  granted.  When  the  meeting  was  called  to  order,  it 
was  announced 

that  the  meeting  would  be  of  an  informal  nature  and  each  person  present 
was  permitted  to  talk  upon  any  matters  that  were  coming  before  the  Joint 
Wage  Committee.  .  .  .  Nearly  all  of  the  visiting  members  had  more  or 
less  to  say,  and  many  things  were  explained  in  regard  to  the  methods  and 
manner  of  conducting  the  conferences.  .  .  .  The  visiting  members  staled 
later,  that  they  had  learned  many  things  concerning  the  Joint  Conference 
which  they  did  not  know,  and  before  retiring  expressed  themselves  as 
being  much  better  satisfied  than  when  they  came. 

"While  these  movements  of  protest  have  no  doubt  exerted 
some  influence  on  the  conduct  of  the  conferees,  neither  in  the 
case  of  the  union  nor  in  that  of  the  manufacturers'  association, 
have  they  effected  any  change  in  policy  concerning  tlie  relation 
of  the  representatives  to  their  respective  organizations.  .Ml  rep- 
resentatives attend  the  annual  conferences  as  exponents  of  the 
sentiments  of  thir  constituents;  rarely,  however,  do  they  attend 
bound  by  specific  instructions. 

No  formal  system  of  voting  is  provided  for  in  the  agreement, 
but  it  is  the  prevailing  practice  in  the  conferences  for  the  manu- 
facturers' representatives  and  for  those  of  the  union  to  vote  as 
units.  A  mere  majority  of  the  members  present,  therefore,  is 
not  sufficient  to  carry  a  measure.  The  measure  must  be  agree- 
able to  a  majority  of  the  representatives  of  each  party  before  it 
can  become  a  part  of  the  agreement. 

On  several  occasions  the  conferences  have  resulted  in  dead- 


PROBLEMS   OF   LABOR  231 

locks.  Under  such  conditions  it  has  been  the  custom  for  the 
conference  to  adjourn  and  for  the  majority  of  the  estabUshments 
to  resume  operation  under  rules  and  prices  of  the  preceding  year 
in  the  hope  that  the  following  year  would  find  the  union  or  the 
manufacturers  less  obdurate.  The  climax  of  a  series  of  de- 
mands by  the  manufacturers  for  substantial  reductions  in  piece 
rates  came  in  1906  when  the  representatives  of  the  emploj'ers 
persisted  in  demanding  reductions  which  the  union  refused  to 
grant.  During  the  debate  on  the  proposition,  Mr  Ralston,  presi- 
dent of  the  manufacturers'  association,  suggested  that  "the  mat- 
ter be  submitted  for  arbitration  to  a  judge  of  the  courts."  The 
suggestion  was  not  acted  upon.  Indeed,  the  consensus  of  opinion 
in  the  trade  seems  to  be  opposed  to  the  submission  of  major 
issues  to  arbitration.  Both  employers  and  employees  prefer  to 
thresh  out  the  matters  in  conference  and,  when  it  is  found  to  be 
impossible  to  reach  an  agreement,  to  work  in  a  state  of  armed 
truce  for  one  or  more  years  under  the  rules  of  previous  years. 
When  it  was  stated  above  that  in  the  event  of  a  deadlock  the 
manufacturers  would  open  their  plants  under  the  rules  and  prices 
in  operation  during  the  preceding  year,  it  should  have  been  noted 
that  these  resumptions  of  work  frequently  took  place  some  time 
after  the  annual  conference  had  adjourned.  During  this  period 
between  the  adjournment  of  the  conference  and  the  acceptance 
by  the  manufacturers  of  the  union's  ultimatum,  the  agreement 
may  be  said  to  have  been  suspended.  For  example,  at  the  con- 
ferences in  1905,  the  manufacturers  demanded  a  general  reduc- 
tion in  piece  rates  of  33 5^  per  cent.  This  reduction  the  union 
would  not  concede.  The  manufacturers,  therefore,  moved  to 
adjourn  without  setting  a  date  for  a  further  conference.  On 
September  i,  1005,  the  president  of  the  Glass  Bottle  Blowers' 
Association  issued  a  circular  letter  containing  the  following 
statement : 

Up  to  the  present  we  have  heard  nothing  from  the  manufacturers' 
association.  Those  among  their  members  who  insisted  on  a  reduction  and 
favored  adjourning  the  conference  until  the  same  was  secured  will  doubt- 
less remain  idle  as  long  as  they  possibly  can.  While  others  in  that  asso- 
ciation, coupled  with  the  independent  manufacturers,  will  begin  starting 
their    factories    early    this   month.^ 

1  They  could  open  their  factories  and  employ  members  of  the  union 
under  the  previous  season's  list  and  rules;  for  on  August  8,  1905,  Presi- 
dent Hayes  had  issued  the  following  circular  letter  to  the  trade:  "Manu- 
facturers who  desire  can  engage  our  members  to  work  by  agreeing  to  pay 
last  season's  wages,  and  if  any  of  them  are  doubtful  about  our  ability  to 
hold  out  and  want  assurance  that  they  will  be  given  the  benefit  of  any 
settlement  that  may  hereafter  be  made  different  from  that  which  we  de- 
manded (last  year's  list  and  rules),  branches  are  authorired  to  say  to 
luch  employert  that  they  will  be  given  the  advantage  of  any  settlement 
that  may  be  made  later  on  and  from  the  date  upon  which  they  started  to 
work." 


232  SI-.I.l-X:i'L':i)    ARTICl.l-.S 

From  this  statement  it  is  seen  that  for  several  months,  at 
least,  after  the  adjournment  of  the  final  conference,  the  industry 
was  virtually  in  a  state  of  lockout,  or,  more  accurateh-,  the 
agreement  was  temporarily  suspended.  The  same  situation  arose 
in  1909.  Again  the  manufacturers'  demand  for  a  substantial  re- 
duction had  been  refused  by  the  union.  Accordingly  the  con- 
ference of  July  26,  1909,  disbanded ;  and  the  manufacturers  did 
not  open  their  plants.  Early  in  September,  however,  the  Amer- 
ican Bottle  Company  agreed  to  accept  the  concessions  of  the 
union.  Moved  by  this  break  in  its  ranks,  the  manufacturers' 
association  sought  another  conference  at  which  an  agreement 
was  finally  reached. 

In  both  instances,  and  in  fact  in  a!)  other  similar  cases  during 
the  life  of  the  agreement,  the  strength  of  the  union,  in  that  it  is 
virtually  impossible  to  run  non-union  shops  in  the  glass  bottle 
industry,  forced  the  employers  to  resume  operation  under  condi- 
tions  not  entirely   satisfactory  to  them. 

Technicall}',  of  course,  this  delay  in  opening  a  plant  might  be 
described  as  a  lockout.  It  has,  however,  not  been  so  regarded 
by  the  parties  to  the  agreement.  Even  though  conferences  were 
adjourned  without  reaching  any  agreement  and  the  manufactur- 
ers were  forced,  probably  because  of  the  superior  strength  ot 
the  blowers'  organization,  lo  employ  the  men  at  terms  unsatis- 
factory to  themselves,  yet  in  the  following  year  they  showed 
confidence  in  the  efficacy  of  a  system  of  collective  bargaining  by 
again    entering   the    conferences    with    their    employees. 

The  Scltlciiicnl  of  Disputes  Arisiitii  I'lnlrr  the  Ac/reenteiit 

In  an  agreement  which  specifies,  in  such  detail  as  does  the 
present  one,  practicalh'  all  of  the  conditions  of  emjjloyment,  the 
matters  which  arise  during  the  year  are  as  a  rule  purely  inter- 
pretations of  the  agreement.  I""or  example,  a  new  bottle  is  in- 
troduced in  one  of  the  factories  and  a  dispute  ensues  as  to  the 
I)rire  to  be  paid  for  Idowing  the  bottle;  since  tlie  agreement 
slates  that  the  bottle  shall  "be  rated  at  the  same  price  and  subject 
to  the  same  rules  in  regard  to  weight,  as  those  specified  in  the 
bracket  which  they  resemble  in  size,  shape,  weight  and  finish," 
but  little  room  is  left  for  any  great  differences  of  opinion.  The 
same  might  be  said  of  any  question  that  might  conceivably  arise 
under  the  agreement.  So  inclusive  are  the  annual  agreements 
and  so  definite  are  their  terms,  that  probably  the  majority  of 
disputes  arising  in  various  localities  are  settled  by  merely  turning 


PROBLKMS    01'    I.ABOR  233 

to  a  particular  rule  in  the  agreement  and  applying  it  to  the  case 
in  point.  On  the  other  hand,  disputes  have  been  observed  under 
the  agreement  where  there  was  no  question  of  the  interpretation 
of  rules,  but  where  one  or  the  other  of  the  parties  deliberately 
violated  or  disregarded  the  agreement. 

The  first  step  in  the  adjustment  of  disputes  under  the  agree- 
ment consists  in  referring  the  matter  to  a  conference  of  the  em- 
ployer and  a  factory  committee.  Most  disputes  are  settled  in 
that  conference.  When,  however,  the  conferees  are  unable  to 
agree,  the  question  is  referred  for  settlement  cither  to  the  presi- 
dent of  the  union  or  to  one  of  the  executive  board  of  that  or- 
ganization whom  the  president  designates  as  his  representative. 
The  president's  decisions  are  final  unless  reversed  at  the  follow- 
ing joint  conference.  Although  the  president  of  the  union  has 
been  acting  as  arbitrator  since  1902,  his  decisions  have  been  but 
rarely  reversed.  The  great  majority  of  his  adjudications  are 
concerned  with  the  determination  of  prices  on  new  ware,  samples 
of  which  are  sent  to  the  central  office  of  the  union  for  his  inspec- 
tion. In  those  cases  where  he  has  decided  upon  a  certain  price 
and  that  price  is  found  by  the  joint  conference  to  have  been  too 
high,  the  manufacturer  is  reimbursed  for  the  excess  wage  pay- 
ments ;  conversely,  a  decision  in  favor  of  the  employer,  which 
might  be  reversed  by  the  joint  conference,  forces  the  employer 
to  make  up  the  difference  in  wages.  Instituted  originally  at  the 
suggestion  of  the  employers,  the  system  of  delegating  to  the 
president  of  the  union  the  power  of  interpreting  rules  and  01 
settling  disputes  has,  during  its  existence  of  twelve  years  or 
more,  worked  admirably.  With  hardly  an  exception  the  deci- 
sions made  by  the  president  during  his  incumbency  have  met 
with  general  approval;  and  no  record  is  as  yet  to  be  found  of 
any  suggestions,  from  either  woi'kman  or  manufacturer,  which 
would  so  modify  that  section  of  the  agreement  as  to  remove 
from  the  president  of  the  Glass  Bottle  Blowers'  Association  his 
present  powers. 

The  histor}-  of  the  operation  of  the  agreement  has  been 
notably  free  from  strikes  and  lockouts.  The  great  centralization 
of  power  in  the  hands  of  the  national  organization  and  the  ap- 
parent general  opinion  among  the  members  of  the  union  that 
such  centralization  is  wise,  has  resulted  in  a  universal  support 
by  the  subordinate  unions  of  the  mandates  of  their  national  offi- 
cers and  of  the  decisions  of  the  joint  conferences.  When,  for 
example,   a  general   reduction  in  piece  rates  was  adopted  by  the 


234  SELECTED   ARTICLES 

conference,  several  local  unions  in  San  Francisco  expressed 
their  dissatisfaction  with  the  agreement  and  struck.  This  viola- 
tion of  the  agreement  was  met  with  prompt  action  by  the  na- 
tional officers  who  ordered  the  strikers  back  to  work.  The  strik- 
ers first  denied  that  they  had  stopped  work,  but  after  a  few- 
days,  when  the  charge  was  proved,  they  returned  to  work  under 
the  prices  and  rules  against  which  they  had  revolted.  The  action 
of  the  national  officers  was  upheld  later  by  the  national  conven- 
tion of  the  union. 

Similarly,  among  the  manufacturers,  the  attempts  to  violate 
the  agreement  by  locking  out  the  employees  or  by  running  shops 
under  rules  contrary  to  those  adopted  by  the  conference  have 
been  few  and  far  between.  In  this  case,  however,  compulsion 
upon  the  manufacturers  has  not  come  from  the  manufacturers' 
association.  This  organization,  unlike  the  Glass  Bottle  Blowers' 
Association,  has  little  control  over  its  members  and  can,  there- 
fore, do  little  in  forcing  its  members  to  observe  the  terms  of  the 
joint  agreements.  The  following  debate  at  the  conference  of 
1905  indicates  the  position  of  the  manufacturers'  association  in 
enforcing  upon  its  members  the  decisions  of  the  joint  confer- 
ence : 

Mr.  Hayes  stated  that  it  was  a  sort  of  rule  among  his  predecessors  at 
these  conferences  to  ask  the  manufacturers  whether  they  would  abide  by 
the  decisions  of  the  conference,  but  such  a  course  has  not  been  his  policy, 
because  he  always  assumed  that  the  agreement  would  be  lived  up  to  by  all 
of  the  manufacturers  represented  by  the  committee,  but  during  the  past 
year  some  had  violated  the  agreement  and  some  had  intimated  that  the 
Executive  Committee  has  been  accused  of  extending  special  favors  to  some 
manufacturers  while  refusing  them  to  others.  .  .  .  The  chairman  (a 
manufacturer)  stated  that  when  the  agreement  is  signed  it  becomes  a  moral 
obligation  of  all  manufacturers  employing  union  labor  to  live  up  to  them, 
but  that  there  was  nothing  in  the  hands  of  the  committee  or  the  individual 
members  thereof  to  enforce  them.  Any  manufacturer  could  refuse  to  obey 
them,   the  power  to   enforce  being  wholly  in   the  hands   of   the  blowers. 

Although  the  power  to  compel  obedience  to  the  agreement 
and  to  the  decisions  of  the  president  of  the  blowers'  association 
in  his  settlement  of  disputes  resides  in  neither  the  employers 
association  nor  the  union,  yet  the  desire  of  the  manufacturers 
generally  to  avoid  any  action  that  might  lead  to  a  discontinuance 
of  the  annual  conference  and  the  strength  of  the  union,  which 
enables  it  to  bring  recalcitrant  employers  into  line  by  threatening 
to  withdraw  their  working  force,  are  the  two  factors  which  oper- 
ate to  prevent  more  frequent  and  more  serious  breaches  of  the 
agreement. 

It  will  have  been  observed  in  the  foregoing  discussion  that 
the  few  suspensions  of  the  agreement  have  arisen  not  from  dis- 


PROBLEMS   OF   LABOR  235 

satisfaction  with  the  adjudications  of  minor  issues  under  the 
agreement,  but  have  in  reality  constituted  revolts  against  the  set- 
tlement of  the  major  issues  embodied  in  the  agreement.  For 
instance,  at  the  preliminar}-  conference  of  1909,  Mr.  Hayes  re- 
ported that  some  of  the  manufacturers  had  refused  to  be  bound 
by  the  agreement  and  had  operated  their  factories  during  the 
so-called  "summer  stop"  agreed  upon  by  the  last  conference. 

Here,  obviously,  there  was  no  question  of  the  interpre- 
tation or  application  of  a  rule  of  the  agreement,  but  a  de- 
liberate disregard  of  a  rule  whose  meaning  and  intent  was 
plain.  This  situation  which  is  in  a  way  a  typical  one  suggests 
the  following  general  proposition  concerning  the  operation  of 
the  agreement :  Where  the  national  agreement  lays  down  in 
detail  working  rules  and  piece  rates,  leaving  to  local  adjust- 
ment matters  of  purely  secondary  importance,  the  disputes 
arising  between  conferences  are  likely  to  be,  as  they  are  in 
this  particular  instance,  protests  not  against  interpretation  of 
the  agreement,  though  there  are  undoubtedly  some  disputes 
of  such  a  character,  but  against  attempts  to  enforce  the  plain 
letter  of  the  agreement.  The  remote  design  behind  such 
protests  is.  of  course,  the  desire  to  stir  up  a  sentiment  against 
the  objectionable  practice  or  rule  and  to  have  that  rule 
amended  or  rejected  at  the  following,  conference. 

The  practical  absence  of  any  widespread  violation  of  the 
agreement  con  be  attributed  primarily  to  two  factors:  (a)  the 
character  of  the  persons  in  the  industry  and  (b)  the  national 
character  of  the  agreement. 

a.  The  members  of  the  Glass  Bottle  Blowers'  Association 
have  always  been  and  are  today  highly  skilled  v/orkmen,  whose 
earnings  were  for  many  years  far  above  those  of  skilled  work- 
men in  other  industries.  The  high  wages  earned  and  the  skill 
required  to  perform  the  work  have  apparently  combined  to  form 
workmen  of  conservative  instincts  and  of  mature  judgment.  The 
character  of  the  workmen  has  again  and  again  been  evidenced 
in  the  selection  of  officers  of  a  high  type  and  in  the  general  sup- 
port by  the  membership  of  such  legislation,  as  the  voluntary  re- 
duction of  piece  rates,  w^hich  would  in  other  industries  have  en- 
gendered the  deepest  hostility  among  the  rank  and  file  of  the 
organization.  In  addition,  problems  following  the  introduction 
of  machinery  of  the  gravest  import  to  all  members  have  been 
met,  if  not  always  with  perfect  assurance  and  without  petty 
squabbles,  at  least  in  an  open-minded  and  intelligent  fashion. 


230  SELECTED   ARTICLES 

b.  The  national  character  of  the  agreement,  which  lodges  in 
the  national  officers  of  the  union  the  responsibility  lor  the  con- 
tent of  the  agreement  and  for  its  enforcement,  imposes  upon 
these  officials  a  personal  interest  in  the  successful  working  of 
the  agreement  which  makes  for  a  more  diligent  and  more 
stringent  enforcement  of  its  terms. 

From  the  standpoint  of  the  machiner_v  of  the  agreement,  also, 
that  clause  which  designates  the  president  of  the  blowers'  asso- 
ciation as  the  arbiter  of  inter-conference  disputes,  probably  in- 
spires in  the  members  of  the  union  a  respect  for  the  agreement 
and  a  belief  in  its  fairness  which  might  otherwise  not  have  ex- 
isted. The  adherence  of  the  employers  to  the  agreement  is  per- 
haps even  easier  to  explain.  In  the  first  place,  this  system  of 
collective  bargahiing,  by  maintaining  uniform  v/age  scales  and 
working  rules  throughout  the  whole  of  the  industry  has  elim- 
inated the  objectionable  inequalities,  as  between  different  em- 
ployers, that  are  inevitable  accompanim.ent  of  a  decentralized 
system  of  collective  bargaining.  Second,  the  history  of  the 
agreement  has  been  such  as  to  modify  to  a  considerable  degree 
the  attitude  of  the  employers  toward  their  workmen.  For  on 
three  different  occasions  the  union,  after  much  pressure  to  be 
sure,  has  agreed  to  substantial   reductions  in  wage  rates. 


PRESENT   INDLTSTRTAE   ISSUES' 

Tlie  attention  of  the  lueiubcrs  of  the  American  Iron  and 
Steel  Institute  has  of  late  been  focussed  on  the  attempt  of  lead- 
ers in  the  American  Federation  of  Labor  to  unionize  the  iron 
and  steel  industry  of  this  country. 

The  present  campaign  was  started  at  St.  Paul,  Minn.,  Tune 
13,  191S,  by  the  adoption  of  a  resolution  introduced  by  delegate 
W.  Z.  Foster,  couched  in  the   following  language: 

Whereas,  The  organization  of  the  vast  armies  of  wage  earners  em- 
ployed in  the  .steel  industries  i.s  vitally  necessary  to  the  further  spread  of 
industrial    democracy   in   America;     and 

IVhereas,  Organized  Labor  can  accomplish  this  great  task  only  by 
putting  forth   a   tremendous   effort;     therefore,   be  it 

Resolved,  That  the  executive  officers  of  the  American  Federation  of 
Labor    stand    instructed    to    call    a    conference,    during    this    convention,    of 

^  By  Elbert  H.  Gary.  From  an  address  before  the  American  Iron 
and  Steel  Institute,  New  York  City,  October  24,  igig.  Judge  Gary  is  head 
of  the  United  States  Steel  Corporation  and  was  a  member  of  JPresident 
Wilson's  White  House  Conference  which  was  called  to  find  some  method  of 
bringing  capital  and  labor  together  and  bringing  about  a  full  rcs\iiiiption 
of   economic   effort. 


PROBLEMS    OF    LABOR  22,7 

delegate-  nf  all  international  unions  whose  interests  arc  involved  in  the 
steel  industries  and  of  all  the  State  Federation  and  City  Central  bodies  in 
the  steel  districts,  for  the  purpose  of  uniting  ail  these  organizations  into 
one  mighty  drive  to  organize  the  steel  plants  of  America. 

The  movement  appears  to  have  proceeded,  under  the  general 
direction  of  Foster,  without  much  result  until  June  13,  1919, 
when  another  resolution  was  adopted  by  the  American  Federa- 
tion of  Labor  at  a  meeting  held  in  Atlantic  City,  which  reads  as 
follows : 

Whereas,  Every  labor  union  in  America,  regardless  of  its  trade  or  in- 
dustry, has  a  direct  and  positive  interest  in  the  organization  of  the  worli- 
ers  in  the  iron  and  steel  industry,  because  the  accomplishment  of  this 
vital  task  will  greatly  weaken  the  opposition  of  employers  everywhere,  to 
the  extension  of  trade  unionism  and  the  establishment  of  decent  conditions 
of  work  and  wages;  and 

IVhereas,  The  organizing  force  now  in  the  field  working  upon  this  vast 
project  is  altogether  inadequate  in  strength  to  carry  on  the  work  in  the 
vigoious   manner   imperatively   demanded   by   the  situation;     therefore,   be   it 

Resolved,  That  President  Gompers  of  the  American  Federation  of 
Labor,  and  Chairman  of  the  National  Committee  for  Organizing  Iron  and 
Steel  Workers,  be  authorized  to  call  a  conference,  during  the  convention 
of  the  American  Federation  of  Labor  of  the  heads  of  all  international 
unions  affiliated  with  the  A.  F.  of  L.,  to  the  end  that  they  make  arrange- 
ments to  lend  their  assistance  to  the  organization  of  the  iron  and  steel  in- 
dustry. 

President  Gompers  thereupon  named  the  heads  of  twenty- 
four  afliliatcd  organizations  to  act  as  a  committee  to  develop 
and  carry  out  plans  for  unionizing  the  iron  and  steel  industry 
pursuant  to  the  resolutions  mentioned.  You  are  familiar  with 
what  has  occurred  since  that  time,  and  you  are  more  or  less  ac- 
quainted with  the  history  of  the  different  union  leaders  who 
have  been  connected  with  the  attempt  to  enlist  the  employes  and 
to  bring  about  a  strike  in  the  manufacturing  works.  The  strike, 
which  has  been  directed  by  the  union  labor  leaders  and  was 
begun,  so  far  as  I  am  informed,  without  any  request  or  authori- 
zation from  the  workmen  themselves,  has  been  conducted  in  the 
usual  way. 

Immediately  preceding  the  day  fixed  for  ordering  out  the 
men,  intimidating  letters,  large  numbers  of  them  being  anony- 
mous, were  sent  to  the  families  of  the  workmen  threatening 
physical  injury  to  the  father  or  husband,  damage  to  or  destruc- 
tion of  the  home  and  kidnapping  of  the  children  unless  the 
emploA-e  referred  to  should  obey  the  order  to  strike.  A  num- 
ber of  the  workmen,  who  had  joined  the  unions  voluntarily, 
accepted  the  order  to  strike  and  others  remained  away  from  the 
factories  through  fear. 

In  many,  if  not  most  of  the  mills,  the  larger  number  of  em- 
ployes  continued   to   work  without   interruption.     At  the   begin- 


238  SELECTED   ARTICLES 

ning,  many  of  the  workmen  who  attempted  to  continue  their 
work  and  others  who  had  remained  at  home  through  fear  and 
attempted  to  return,  were  confronted  in  the  pubHc  streets  and 
elsewhere  by  strikers,  or  pickets,  and  importuned  to  engage  in 
the  strike;  and  many  were  assaulted  and  seriously  injured. 
After  protection  was  afforded  by  the  police,  sheriff's  deputies. 
State  constabulary,  and  in  some  cases  State  or  National  troops, 
the  numbers  resuming  work  increased  appreciably  from  day  to 
day  until  in  many  places  operations  are  about  normal.  Taken 
as  a  whole,  the  situation  at  present  is  good  and  steadily  improv- 
ing. 

The  Sole  Issue— Closed  Shop  or  Cpen  Shop 

It  will  be  observed  that  the  strike  is  not  the  result  of  any 
claim  by  any  workmen  for  higher  wages  or  better  treatment, 
nor  for  any  reason  except  the  desire  and  effort  on  the  part  of 
union  labor  leaders  to  unionize  the  iron  and  steel  industry.  As 
stated  in  the  first  resolution,  the  action  taken  was  "for  the  pur- 
pose of  uniting  all  these  organizations  into  one  mighty  drive  to 
organize  the  steel  plants  of  America." 

Without  discussing  for  the  present  the  merit  or  demerit  of 
labor  unions,  it  may  be  observed  that  union  labor  leaders  openly 
state  that  they  seek  to  unionize  or,  as  they  say,  "organize"  the 
whole  industry  of  this  country.  Those  who  do  not  contract  or 
deal  with  unions,  although  they  do  not  combat  them,  insist  upon 
absolute  freedom  to  both  employer  and  employe  in  regard  to 
employment  and  the  management  of  the  shops.  The  non-union 
employers  and  employees  both  stand  for  the  open  shop.  The 
unions  argue  for  the  closed  shop  or,  as  the  leaders  now  insist, 
"the  right  of  collective  bargaining  through  labor-union  leaders." 

Every  proposition  contended  for  by  the  labor  unions  at  the 
National  Industrial  Conference  at  Washington  led  to  domina- 
tion of  the  shops  and  of  the  men  by  the  union  labor  leaders. 
Every  position  taken  by  the  other  side  centered  on  the  open  shop. 
This  is  the  great  question  confronting  the  American  people  and, 
in  fact,  the  world  public.  From  8o  per  cent,  to  QO  per  cent,  or 
more  of  labor  in  this  country  is  non-union.  It  is  for  them  and 
the  employers  generally,  and  the  large  class  of  men  and  women 
who  are  not,  strictly  speaking,  employers  or  wage  earners  to 
determine  whether  or  not  it  is  best  for  the  whole  communit}- 
to  have  industry  totally  organized. 

Judging  by  experience,  we  believe  it  is  for  the  best  interest 
of  employer  and  employee  and  the  general  public  to  have  a  busi- 


PROBLEMS   OF   LABOR  239 

ncss  conducted  on  the  basis  of  what  we  term  the  "open  shop," 
thus  permitting  any  man  to  engage  in  any  line  of  employment, 
or  any  employer  to  secure  the  services  of  any  workman  on  terms 
agreed  upon  between  the  two,  whether  the  workman  is  or  is  not 
connected  with  a  labor  union.  The  verdict  of  the  people  at 
large  will  finally  decide  this  question,  and  the  decision  will  be 
right. 

IVhy  the  Industrial  Conference  Failed 

I  think  the  fundamental  question  submitted  to  the  Confer- 
ence for  recommendation  to  industries  was  the  open  shop;  that 
question  apparently  could  not  be  decided  by  majority  vote  for 
the  reason  that  the  Conference  was  organized  into  three  groups 
called  Labor,  Emplo3'ers,  and  Public.  No  affirmative  action 
under  the  constitution  or  adopted  rules  could  be  taken  except 
by  the  unanimous  vote  of  the  three  groups,  each  of  which  voted 
by  a  majority  of  all  its  members.  It  was  necessary  to  have  such 
a  condition,  as  otherwise  there  could  be  no  conference  in  which 
there  would  be  an  agreement  between  capital  and  labor,  so-called. 

Collective  Bargaining 

The  union  labor  advocates  stand  for  collective  bargaining 
through  the  unions.  The  others  favor  collective  bargaining 
through  representatives  selected  by  the  employees  themselves 
from  their  own  numbers. 

The  Employers'  Group  offered  the  following  resolution : 

Resolved,  That,  without  in  any  way  limiting  the  right  of  a  wage 
earner  to  refrain  from  joining  any  association  or  to  deal  directly  with  his 
employer  as  he  chooses,  the  right  of  wage  earners  in  private  as  dis- 
tinguished from  Government  employment  to  organize  in  trade  and  labor 
unions,  in  shop  industrial  councils,  or  other  lawful  form  of  association,  to 
bargain  collectively,  to  be  represented  by  representatives  of  their  own 
choosing  in  negotiations  and  adjustments  with  employers  in  respect  to 
wages,  hours  of  labor,  and  other  conditions  of  employment,  is  recognized: 
and  the  right  of  the  employer  to  deal  or  not  to  deal  with  men  or  groups  of 
men  who  are  not  his  employes  and  chosen  by  and  from  among  them  is 
recognized;  and  no  denial  is  intended  of  the  right  of  an  employer  and  his 
workers  voluntarily  to  agree  upon  the  form  of  their  representative  rela- 
tions. 

The    Employers'    Group    voted    in    favor    of   this    resolution. 
The  Public  Group  and  the  Union  Labor  Group  voted  against  it. 
The  Public  Group  offered  the  following  resolution : 

The  right  of  wage  earners  in  trade  and  labor  unions  to  bargain  col- 
lectively, to  be  represented  by  representatives  of  their  own  choosing  in 
negotiations  and  adjustments  with  employers  in  respect  to  wages  hours  of 
labor,  and  relations  and  conditions  of  employment  is  recognized. 

This  must  not  be  understood  as  limiting  the  right  of  any  wage  earner 
to  refrain  from  joining  any  organization  or  to  deal  directiv  with  his  em- 
ployer if  he  so  chooses. 


240  SELECTED    ARTICLES 

The  Public  Group  voted  in  favor  of  this   resolution.     The 
Employers'  Group  and  the  Union  Labor  Group  voted  against  it. 
The  Lhiion  Labor  Group  finally  offered  the  following  resolu- 
tion : 

The  right  of  wage  earners  to  organize  without  discrimination,  to  bar- 
gain collectively,  to  be  represented  by  representatives  of  their  own  choos- 
ing in  negotiations  and  adjustments  with  employers  in  respect  to  wages, 
hours  of  labor,  and   relations  and  conditions  of   employment  is   recognized. 

The  Union  Labor  (iroup  and  the  Public  Group  voted  in 
favor  of  the  resolution.  The  Employers'  Group  voted  against 
it.  Thereupon  the  Union  Labor  Group  retired  from  the  Con- 
ference. 

All  through  the  Conference  whenever  the  (lucstion  of  col- 
lective bargaining  was  discussed,  it  was  apparent  that  the  union 
labor  leaders  would  not  support  any  resolution  in  favor  of  col- 
lective bargaining  except  on  the  basis  that  collective  bargaining 
meant  bargaining  through  labor  unions. 

As  further  evidence  of  the  attitude  of  the  union  labor  lead- 
ers it  may  be  mentioned  that  in  the  twelve  points  published  by 
the  leaders  who  were  conducting  the  strike  they  included  and 
insisted  upon  the  following:     "Abolition  of  company  unions." 

The  Unions  claim  that  collective  bari^aining  through  different 
lorms  of  shop  organization,  made  up  of  the  employees  tends  to 
limit  the  extension  of  unions  by  increasing  their  numbers.  The 
non-union  employes  and  their  employers  insist  that  collective  bar- 
gaining through  labor  unions  means  that  employees  are  forced 
lo  join  the  unions,  as  otherwise  they  could  not  be  represented. 
So  it  is  perfectly  clear  that  the  whole  argument  returns  to  the 
main  proposition  of  open  or  closed  shop. 

In  the  Conference  there  was  no  objection  offered  by  any 
one  to  some  form  of  collective  bargaining  as  between  employees 
and  employers,  provided  both  were  free  from  outside  represen- 
tation and  direction. 

The  Labor  Group,  so  called,  was  made  up  of  union  labor 
leaders,  leaving  imorganized  labor  without  special  representa- 
tion. The  same  mistake  seems  to  have  been  made  by  a  large 
portion  of  the  public  which  was  made  throughout  the  war, 
namely,  that  organized  labor  really  represents  the  workmen  or 
wage  earners  generally,  notwithstanding,  as  a  matter  of  fact, 
that  at  least  85  per  cent,  of  the  total  are  non-union — not  mem- 
bers of  any  union  organization. 


PROBLEMS    OF   LABOR  2ji 

The  Employers'  Group,  in  which  were  men  first-class  in 
every  respect,  included  men  connected  with  large  and  important 
lines  of  industrj-,  and  also  included  several  others  some  of 
whom  at  least  should  have  been  with  the  Labor  Group.  In 
selecting  the  Public  Group  there  were  overlooked  thousands  of 
vocations,  professions,  artisan  and  other  lines  of  industry,  all 
of  whom  are  more  or  less  affected  by  the  cost  of  production, 
the  expense  of  living  and,  therefore,  the  control  and  conditions 
of  both  labor  and  capital. 

Iniprovenicnt  of  JVorking  Conditions 

However,  it  would  seem  there  were  many  objects  which 
might  appropriately  have  been  considered  by  the  Conference, 
and  conclusions  for  recommendations  arrived  at  by  unanimous 
consent,  which  would  be  advantageous  to  the  public  good,  and 
therefore  to  all  mankind — such  as  working  hours,  living  and 
working  conditions,  women's  work,  child  labor,  recreation, 
medical  and  surgical  treatment,  pensions,  relief  in  tim.es  of 
stress,  rates  of  compensation,  schools,  churches,  and  other  edu- 
cational facilities.  With  the  right  disposition  and  intelligence, 
the  Public  Group,  as  sole  survivor  of  the  Conference,  might 
have  agreed  upon  recommendations  to  the  industrial  world 
which  should  be  of  substantial  benefit.  All  of  us  are  in  favor 
of  these  principles,  and  of  any  others  that  maj'  be  suggested 
which  we  believe  will  be  of  real  benefit  to  tlie  wage-earners 
and  to  the  general  public. 

I  conceive  it  to  be  proper  in  this  family  of  industrial 
workers  consisting"  of  2000  members  of  the  most  important 
basic  industry,  to  claim  that  we  have  demonstrated  in  practice 
that  we  are  upon  a  plane  which  is  higher  and  better  than  ever 
before  occupied  by  this  industr}'  in  this  country;  that  we  have 
been  striving  to  deserve  the  approval  of  all  who  are  interested 
in  our  businees  and  our  decisions ;  that  we  have  sought  the 
confidence  of  our  employees;  our  customers,  our  competitors, 
our  principals  who  own  the  properties  we  manage,  and  the 
general  public. 

And  yet  it  would  be  unfortunate  if  we  could  not  discover 
opportunities  for  further  improvement ;  if  we  failed  to  read  or 
to  listen  to  the  criticisms  of  others;  if  we  let  pass  the  requests 
or  suggestions  of  our  workmen   for  changes  whicli  they  believe 


242  SELECTED   ARTICLES 

would  be  proper  concerning  their  employment;  if  we  neglected 
to  give  our  employees— individually  or  in  groups — opportunities 
to  discuss  with  the  managers  all  questions  of  mutual  interest; 
if  we  minimize  in  any  degree  the  well-recognized  fact  that  the 
public  good  is  of  prime  importance  and  that  private  interests 
must  be  subordinated.  It  is  a  pleasure  to  me  to  know  from 
long  experience  that  I  am  appealing  to  a  sympathetic  audience  in 
behalf  of  a  continued  effort,  on  our  part,  to  be  more  worthy  of 
the  respect  and  confidence  of  every  right-thinking  person  who 
is  familiar  with  our  industrial  life. 

Considerable  has  been  said  in  public  of  late  concerning  the 
attempt  to  spread  the  doctrine  of  Bolshevism  in  this  country. 
All  of  us  have  known  for  some  time  that  this  disease  is  persis- 
tent, and  that  there  has  been  some  inoculation  even  in  this  best 
of  countries.  Still,  we  deny  that  there  is  danger  of  serious 
trouble.  There  is  only  one  way  to  treat  this  disease,  and  that 
is  to  stamp  it  out;  to  meet  it  boldly  wherever  it  can  be  found; 
to  expose  it  and  give  it  no  chance  for  development. 

In  this  free  country,  with  its  reasonable  laws  wisely  admin- 
istered, its  golden  harvests,  healthful  climate,  peace-loving  in- 
habitants who  are  generous  in  contributions  for  relief  and  pro- 
tection, schools,  churches  and  hospitals,  there  is  no  room  except 
in  the  prisons  for  the  anarchist,  the  bolshevist,  or  the  other  in- 
dividual who  seeks  to  substitute  the  rule  of  force  for  the  rule 
of  law  and  reason.  If  there  are  slinking,  desperate,  murderous 
Bolsheviki  in  this  country,  even  in  small  numbers,  I  believe  the 
Secret  Service  Department  of  the  Government  should  detect 
and  expose  them,  and  that  the  iron  hand  of  justice  should  pun- 
ish them  as  they  deserve.  And,  as  I  have  faith  in  this  country 
and  in  its  institutions,  I  believe  this  will  be  done  and  done 
promptly. 

Any  one  who  doubts  the  ability  of  the  proper  authorities  to 
protect  the  persons  and  property  of  our  people  against  bolshe- 
vism  and  other  similar  doctrines,  fails  to  appreciate  the  courage 
of  our  citizens,  and  the  terrible  force  and  strength  of  subdued 
calmness  when  they  are  surrounded  by  threatened  danger. 

For  ourselves,  let  us  be  fair  and  just,  considerate  and  de- 
termined, hopeful  and  complacent.  We  shall  emerge  from  the 
waves  of  unrest  which  naturally  follow  the  demoralization  and 
terrors  of  war,  and  as  a  people  we  will  be  better  and  stronger 
than  ever. 


PROBLEMS    OF    LABOR  243 

THE  OPEN   SHOP,   ONCE  A  LOCAL   ISSUE,   IS 

NOW  VITAL  AMERICAN   PRINCIPLE' 

Open  Shop  Vital 

"The  open  shop  presupposes  the  principle  of  Americanism. 
The  closed  shop,  on  the  other  hand,  represents  an  un-American 
autocracy,  and  a  confiscation  of  liberty  and  of  property  rights. 
If  the  closed  shop  should  supervene  in  this  country,  the  pres- 
ent cost  of  living  would  within  four  years  seem  low  by  com- 
parison, and  the  domestic  as  well  as  the  foreign  trade  of  the 
United  States,  which  we  now  seem  to  hold  securely,  would  in- 
evitably fall  into  other  hands.  The  closed  shop  means  death 
to  commerce.  There  can  be  no  misunderstanding  of  that  effect 
and  anyone  having  a  primary  knowledge  of  sound  economics 
will  accept  it  without  question.  Two  years  ago  the  open  shop 
was  a  local  issue,  today  it  is  a  national  principle. 


FACTS   ABOUT  THE  NON-UNION   SHOP' 

Judge  Gary  has  shown  an  active  interest  in  the  rights  of  the 
non-union  workmen  in  the  steel  corporation's  employ.  He  has 
deemed  it  wise  to  become  a  champion  of  their  rights,  and,  as 
their  champion,  to  refuse  to  recognize  the  duly  appointed  repre- 
sentatives which  his  organized  workers  have  selected. 

The  question  of  the  so-called  open  shop  has  again  received  a 
great  deal  of  attention,  owing  to  Judge  Gary's  position. 

The  principles  involved  in  the  union  and  the  non-union  shop 
have  been  discussed  time  and  again,  and  for  the  present  purpose 
will  not  be  referred  to.  Sometimes  a  situation  can  be  made 
much  clearer  by  a  study  of  the  facts  which  have  been  proven, 
rather  than  by  a  discussion  of  principles  or  theory,  for  there  can 
be  much  humbugging  and  much  sophistry  introduced  into  the 
discussion  of  a  theoretical  problem,  but  it  is  a  very  difficult  thing 
to  camouflage  well-known  facts. 

What  are  some  of  the  most  prominent  facts  connected  with 
the  so-called  "open  shop,"  where  the  employe  must  deal  with 
his  employer  as  an  individual? 

Under  the  operation  of  the  non-union  foundry  in  the  years 

1  From  an  address  by  William  H.  Barr,  President  American  Founders' 
Association. 

'From   International    Moklers'   Journal.      55:902-3.      November,    1919. 


244  SELECTED   ARTICLES 

gone  by,  the  moldcrs  worked  ten,  eleven  and  twelve  hours  a  day. 
In  many  foundries  they  not  only  failed  to  receive  time  and  a  half 
for  overtime,  but  received  no  overtime  at  all,  considering  them- 
selves lucky  if  the  bottom  dropped  in  time  to  quit  at  the  regular 
closing  hours. 

There  were  no  shop  rules  or  regulations  in  which  the  molders 
had  a  voice;  there  was  no  minimum  wage  rate,  but  in  almost 
every  foundry  there  was  some  bone-headed,  strong-backed  young 
man  who  received  a  little  more  than  the  other  molders  because 
he  was  employed  to  set  the  pace,  and  the  pace  w^hich  he  set  was 
used  as  the  pace  which  other  molders  must  follow  if  they  were 
to  hold  their  jobs. 

In  those  good  old  days  the  foundrymen  discharged  any  moldcr 
who  began  to  voice  dissatisfaction  with  conditions  in  the  shop, 
and  if  the  discharge  of  one  man  was  not  sufficient,  other  inde- 
pendent spirits  also  were  forced  to  go  to  the  office  and  get  their 
money.  The  result  was  intimidation  of  the  other  men  in  the  shop 
— those  who  were  paying  for  a  little  home,  those  who  had  a 
family  of  children  whom  they  were  endeavoring  to  put  through 
the  public  schools. 

In  those  days  of  free  and  independent  workmen,  it  was  the 
foundrymen  who  determined  what  the  price  should  be  on  a  piece 
work  job,  and  the  molder  who  did  not  like  the  foundrj^men's 
price  could  quit  the  foundry,  and,  if  he  made  too  strong  an  ob- 
jection, would  probably  find  himself,  after  having  been  dis- 
charged, blacklisted  in  the  other  foundries. 

And  because  of  conditions  that  developed  in  the  happy  days 
of  free  and  independent  molders,  which  the  "open  shop  advo- 
cate" desires  to  recall,  many  of  the  foundrymen,  because  of  the 
suicidal  underbidding  for  work,  were  unable  to  keep  the  shcrifT 
from  their  doors. 

It  was  under  the  so-called  "openshop"  that  the  evils  of  child 
labor  and  unprotected  female  labor  developed  their  most 
malignant   features. 

It  was  under  these  conditions  that  the  most  dangerous  ma- 
chinery went  unguarded. 

It  was  under  these  conditions  that  great  numbers  of  workers 
were  compelled  to  toil  for  so  many  hours  and  at  such  a  low  wage 
rate  per  day  that  they  deteriorated  physically,  that  they  were 
forced  to  live  like  animals  herded  together  in  barrack-like  tene- 
ments, where  each  family  had  but  two  or  three  rooms. 

These    conditions,    which    not    only    were    imjust,    but    which 


PROBLEAIS    OF   LABOR  245 

were  destroying  the  physical  and  mental  vigor  of  the  workers, 
did  not  begin  to  change  until  the  workers  organized.  The  legis- 
lation abolishing  child  labor,  protecting  female  labor,  safe-guard- 
ing dangerous  machiner}',  establishing  workmen's  compensation, 
only  came  after  labor  became  well  organized  and  had  established 
union  shops.  The  shorter  workday,  the  minimum  wage  rate,  the 
setting  of  piece  prices  by  the  committee  and  the  foundrymen, 
only  came  into  existence  with  the  organizing  of  union  foundries. 
If  the  non-union  shops  in  the  industries  had  established  bet- 
ter conditions  for  their  employes  than  existed  in  union  shops, 
there  w^ould  be  no  effective  trade-union  movement.  The  very 
existence  of  an  active,  practical,  intelligent,  well-organized  and 
w^ell-financed  trade-union  movement  is  the  strongest  argument  in 
existence  to  prove  that  the  so-called  open  shop  failed  to  establish 
as  beneficial  conditions  for  the  workers  as  those  which  exist  in 
plants  where  the  workers  are  well  organized. 


CLOSED  SHOP  VERSUS  OPEN  SHOP' 

The  increasing  activity  of  trade  unions  in  pressing  their 
claims  for  recognition  at  the  present  time  is  resulting  in  a  re- 
newal of  the  discussion  of  the  merits  of  the  closed  shop  versus 
the  open  shop.  The  campaign  against  the  closed  shop  was  so 
successful  in  certain  industries  a  dozen  or  more  years  ago  that 
the  movement  itself  seems  to  have  lost  momentum  because  of  its 
success.  Just  now,  with  unprecedented  demands  for  all  grades 
and  classes  of  labor,  the  workers  seem  to  have  regained  a  part 
of  their  lost  bargaining  power  and  to  have  been  placed,  tem- 
porarily at  least,  in  a  position  to  again  demand  recognition  from 
those  employers  who  for  a  generation  have  refused  to  meet  with 
the  representatives  of  organized  labor.  Hence  the  reappearance 
of  the  argximents  for  and  against  the  closed  shop. 

For  the  most  part  this  discussion  is  conducted  by  employers 
or  their  representatives,  and  is  therefore  stated  in  the  terminol- 
ogy common  to  that  group.  But  even  when  the  press  and  the 
public  give  attention  to  the  question,  we  are  accustomed  to  accept 
the  employers'  definitions  of  the  terms  open  shop  and  closed 
shop,  apparently  without  stopping  to  inquire  whether  or  not 
they  are  correct.     We  ignore  labor's  substitute  terms  which,  al- 

1  By  H.  E.  Hoagland.  American  Economic  Review.  8:752-62.  Decem- 
ber, 1918. 


246  SELECTED   ARTICLES 

though  adinittedl}-  biased  and  unrepresentative,  should  at  least 
be  given  consideration.  If  we  are  to  be  the  impartial  third  party 
to  industrial  disputes,  should  we  not  learn  how  much  truth  there 
is  in  the  contentions  of  each  of  the  two  other  parties  and,  if  nec- 
essary, adopt  new  terms  which  are  representative  and  which  arc 
accurately  descriptive?  It  is  in  the  hope  of  contributing  to  this 
end  that  the  writer  has  made  the  following  analysis.  In  each 
case  he  has  sought  the  expressions  of  the  recognized  leaders  of 
both  labor  and  capital  in  order  that  he  may  present  the  views  of 
both  parties  fairly.  Whether  or  not  the  conclusions  of  this  arti- 
cle are  accepted,  it  is  high  time  to  give  attention  to  the  facts 
upon  which  these  conclusions  are  based  in  order  to  find  some 
classification  of  terms  which  will  be  fair  to  both  capital  and 
labor  and  intelligible  to  the  public. 

First,  what  are  the  facts  to  be  considered?  Whatever  defini- 
tions we  give  to  the  terms  open  shop  and  closed  shop  we  agree 
that  wc  are  trying  to  describe  the  relationship  of  trade  unionism 
to  industry.  Perhaps  the  reason  we  do  not  agree  upon  definitions 
is  that  this  relationship  is  too  complex  to  be  fully  described  I)y 
two  simple  terms.    Some  of  these  conditions  are  as  follows: 

1.  There  is  the  shop  which  chooses  to  employ  none  but 
union  members  because  the  employer  believes  that  the  union  can 
supply  him  with  more  efhcient  workmen  than  he  can  secure  in 
any  other  manner. 

2.  Then  there  is  the  shop  which  employs  none  hut  union 
members  because  the  employer  fears  to  incur  the  enmit\  of  the 
labor  organization  to  which  his  workmen  belong. 

In  both  of  tliesc  cases  the  employer  sooner  or  later  establishes 
or  accepts  a  definite  policy  of  employing  only  union  members  and 
incorporates  this  policy  into  an  agreement  with  the  union. 

3.  Other  employers,  while  agreeing  with  the  union  upon  the 
terms  of  the  labor  contract,  refuse  to  concede  the  exclusive  em- 
ployment of  union  members.  Such  employers  may  concede  a 
definite  percentage,  may  show  a  preference  for  union  men  when 
other  considerations  are  approximately  equal  (which  may  result 
in  a  shop  with  100  per  cent  union  membership),  or  may  exercise 
a  preference  for  non-union  men  though  employing  tliem  at  union 
terms. 

Some  employers,  through  necessit.v,  deal  with  their  workmen 
only  as  individuals.  This  may  be  either  because  the  workmen 
have  no  union  or,  if  they  have,  because  it  is  weak  and  unrepre- 
sentative of  employees  in  that  class  of  work. 

5.     Still    others,    through    choice,    insist     upon     dealing   with 


PROBLEMS    OF   LABOR  247 

workmen  only  as  individuals,  yet  do  not  refuse  absolutely  to  hire 
union  members.  Employers  in  this  group  are  not  indifferent  to 
unionism  but  rather  pursue  a  watchful  policy,  using  means  to 
weaken  its  union  when  the  membership  in  the  shop  becomes 
threatening  and  ignoring  the  organization  entirely  when  its  rep- 
resentation in  the  shop  is  too  small  to  cause  concern. 

6.  Then  there  are  employers  who  not  only  refuse  to  deal 
with  unions  but  who  will  not  knowingly  employ  workmen  who 
are  union  members.  They  will  even  dismiss  employees  imme- 
diately upon  learning  that  they  are  members  of  a  labor  organiza- 
tion. 

7.  Finally,  the  unions  themselves  occasionally  introduce  fur- 
ther complications,  by  refusing  to  permit  their  members  to  work 
in  shops  on  strike  or  in  shops  declared  unfair  for  any  other 
reason. 

Even  such  a  classification  does  not  exhaust  the  possibilities 
for  confusion  in  the  popular  discussions  of  open  shop  versus 
closed  shop.  For  while  it  is  popularly  assumed  that  all  unions 
pursue  the  same  policy  with  respect  to  the  degree  of  control 
they  exercise  over  the  supply  of  men  in  their  trades,  such  is  not 
the  case.  Some  unions  have  no  apprenticeship  regulations  and 
nominal  initiation  fees.  They  admit,  without  prejudice,  any 
workman  who  can  demonstrate  his  ability  to  perform  the  duties 
required  in  the  trade.  Other  unions  restrict  their  membership 
by  refusing  to  admit  qualified  workmen  except  upon  payment  of 
extortionate  initiation  fees  which  amount  in  their  operation  to 
an  effective  obstacle  to  union  membership.  This  in  turn  may 
mean  at  times  an  equally  effective  bar  to  employment  at  that 
particular  trade.  Still  other  unions  limit  the  recruits  to  their 
trades  by  arbitrary  apprenticeship  ratios  which  are  governed, 
more  or  less,  by  the  needs  of  the  trade,  but  which  operate  to 
maintain  a  monopoly  of  labor  for  the  particular  union  members 
involved.  Finally,  some  unions  carry  the  restriction  of  ap- 
prentices to  the  extreme  of  limiting  learners  in  the  trade  to  the 
sons  of   union   members. 

These  facts  indicate  the  complexity  of  the  problem  of  imion 
relationship  to  industry.  Yet  how  different  is  the  interpretation 
often  given  to  a  discussion  of  this  problem.  The  very  attempt 
to  simplify  a  complex  situation  often  results  in  the  omission  of 
important  considerations.  That  this  is  true  of  the  question  of 
open  shop  versus  closed  shop  will  be  made  clear  by  the  following 
analysis. 


248  SJ'.LECTI-ID   ARTICLES 

From  the  employers'  point  of  view,  the  closed  shop  is  a  "mo- 
nopoly in  favor  of  the  particular  members  of  the  union  which  is 
a  party  to  the  closed-shop  agreement"  :  not  a  "real  monopoly" 
but  one  which  is  artificial  and  arbitrary  because  "outside  its 
ranks  there  is  a  large  supply  of  labor  seeking  employment,  and 
it  can  maintain  its  monopoly  only  by  preventing  this  potential 
supply  from  reaching  its  natural  market  and  coming  in  contact 
with  the  correlative  demand  of  the  employer.  .  .  .  This  pre- 
vention is  accomplished  in  one  way  and  in  one  way  onlj' — by  the 
use  of  force  and  coercion  in  one  form  or  another,  either  to  keep 
the  outsider  from  accepting  employment  or  to  keep  the  employer 
from  accepting  his  services."  i 

Any  employer  who  resists  the  demand  for  a  closed  shop  "is 
said  to  have  an  open  shop" ;  a  shop  which  "is  free  to  all,  to  the 
union  man  as  well  as  the  non-union  man."  - 

Trade  unionists,  on  rfie  contrary,  claim  that  "there  is  no 
closed  shop."  "When  confronted  by  persons  who  persist  in 
speaking,  in  private  and  public,  of  the  'closed  shop,'  the  trade 
unionists  recognize  by  that  sign  they  are  dealing  with  an  enemy, 
employing  the  verbal  arnmunidon  of  an  enemy,  distorting  facts 
as  an  enemy,  and  without  having  the  manliness  and  candor  of  a 
courageous  enemy.""  Open  shops,  according  to  trade  tmionists, 
"are  in  fact  closed  shops  against  union  men  and  zvonien."'^  Or 
again,  "In  reality  the  open  shop  means  only  the  open  door 
through  which  the  union  man  goes  out  and  the  non-union  man 
comes  in  to  take  his  place.""' 

For  the  most  part  economic  writers  have  adopted  the  em- 
ployers' definitions  of  open  and  closed  shop,  without  stopping 
to  inquire  whether  or  not  there  may  be  situations  not  covered 
by  these  two  terms.''  Others,  looking  a  little  farther  into  in- 
dustrial relations,  nevertheless  use  the  one  term,  open  shop,  to 
describe  any  one  of  the  following  conditions:  (i)  A  shop  in 
which  "union  men  or  non-union  m.en  are  hired  indifferently" 
(2)  a  shop  "entirely  filled  with  union  men";    (3)    a  shop  "open 

1  Walter  Drew,  "Closed  Shop  Unionism,"  in  Bulletin  no.  16,  National 
Association    of    Manufacturers,    p.    4-5. 

*  W.  H.  Pfahler,  in  American  Economic  Association  Publications,  Third 
Series,    vol.    4.    p.     183,    186. 

'Samuel   Gompers,   in  American  Federationist,  vol.    18    p.    118. 

*  VV.   E.    Bryan,   in  American  Federationist,  vol.    19,   p.   321. 
"Clarence    Darrow,    (luoted    in    Current   Literature,   vol.    51,    p.    654. 

'  For  example,  Professor  Taussig  after  discussing  the  closed  shop  says, 
"The  alternative  is  the  open  shop  in  which  the  employers  deal  with  their 
laborers  individually,  or  at  least  deal  with  them  irrespective  of  their  being 
members  of  the  union."  Principles  of  Economics,  vol.  II,  p.  26g.  Most 
writers  of  economic    texts   follow   Taussig  in   this   classification. 


PROBLEMS    OF    LABOR  2|Q 

only  to  non-union  men.""  No  account  is  taken  of  the  shops 
which  could  properly  be  classified  under  neither  open  shop  as 
here  defined  nor  the  employers'  definition  of  closed  shop. 

Other  writers,  more  careful  of  their  terminology,  accept  the 
employers'  definition  of  open  shop  but  give  a  new  name  to  the 
condition  described  by  the  trade  unionists  as  an  open  shop  in 
practice.*  In  a  few  instances  attempts  at  a  more  exact  classifi- 
cation have  been  made  by  economic  writers.  Professor  Com- 
mons has  made  one  such  classification  which  meets  some  of  the 
objections  stated  above.     He  says: 

The  closed  shop  would  be  one  viewed  from  the  side  of  the  contract, 
and  would  be  designated  as  one  which  would  be  closed  against  the  non- 
unionist  by  a  formal  agreement  with  the  union;  the  open  shop  as  one, 
where,  as  far  as  the  agreement  is  concerned,  the  employer  is  free  to  hire 
union  or  non-union  men;  the  union  shop  as  one  where,  irrespective  of  the 
agreement,  the  employer  as  a  matter  of  fact,  has  only  union  men.  Thus 
an  open  shop  according  to  agreement,  might  be  in  practice  a  union  shop, 
a  mixed  shop  or  even  a  non-union  shop.  The  closed  shop  would,  of 
course,  be  a  union  shop,  but  the  union  shop  might  be  either  closed  or 
open.* 

Marcus  M.  Marks  has  made  a  more  minute  classification  in 
which,  apparently,  he  has  attempted  to  include  all  possible  con- 
ditions of  industrial  relationship  between  labor  and  capital.  His 
definitions  are  as  follows:  (i)  The  anti-union  shop  where  the 
employer  is  "emphatically  and  frankly  opposed"  to  the  organiza- 
tion of  his  workmen.  He  will  not  knowingly  employ  a  union 
man  and  will  discharge  those  who  join  unions  at  any  time.  (2) 
The  shop  which  is  open  because  there  is  no  union  for  the  work- 
men to  join.  (3)  The  "typical  open  shop"  where  the  employer  is 
indififerent,  neutral,  or  even  friendly  toward  the  union  but  will 
not  grant  it  an  agreement.  Neither  does  he  discriminate  against 
union  members.  (4)  The  open  shop  which  employs  both  union 
and  non-union  v,orkmen  but  where  the  union  either  signs  an 
agreement  with  the  employer  or  reaches  a  mutually  satisfactory 
understanding  with  him.  (5)  The  union  shop,  all  of  whose 
workmen  are  union  men  though  the  employer  may  not  even 
know  of  the  existence  of  the  union.  At  any  rate  he  does  not 
grant  it  recognition.  (6)  The  closed  shop  with  the  open  union. 
The  employer  is  free  to  hire  whomsoever  he  chooses  provided 

"  C.  \V.  Eliot,  Future  of  Trade   Unionism  and  C apitalism ,  p.  62-63. 

*  F.  T.  Carlton,  History  and  Problems  of  Organised  Labor,  p.  122. 
defines  open  shop  as  follows:  "An  open  shop  is  one  in  which  union  and 
non-union  men  work  or  may  work,  side  by  side.  No  discrimination  ij 
practiced  against  union  or  non-union  men."  Professor  Carlton  then  divides 
other  .shops  into  anti-union  shops  closed  to  union  men,  closed  shops  with 
open   unions,   and  closed  shops   with   closed  unions. 

9  Labor    and    Administration,    p.    89-90. 


250  SELECTED   ARTICLES 

they  join  the  union  at  once.  The  union  of  course  receives 
recognition.  (7)  The  closed  shop  with  the  closed  union.  New 
workmen  are  obtained  only  by  application  to  the  business  agent 
of  the  union  and  if  an  employee  loses  standing  with  the  union 
the  employer  agrees  to  discharge  him  upon  the  request  of  the 
union. 

But  why  call  a  shop  "open"  if  the  employer  deliberately  hires 
none  but  non-union  men?  Or  why  speak  of  a  union  shop  if  the 
workers  therein  give  so  little  attention  to  their  organization  that 
the  employer  does  not  even  know  of  its  existence?  And  surely 
tliere  is  a  very  great  difference  between  the  "open  shop"  which 
refuses  to  recognize  the  union  and  the  one  which,  while  hiring 
non-union  men  as  well  as  union  men,  gives  the  union  a  voice  in 
the  determination  of  the  conditions  under  which  its  members 
work. 

Furthermore,  we  are  accustomed  to  think  of  the  open  shop 
as  the  typically  American,  man-to-man  method  of  agreement 
upon  the  terms  of  the  labor  contract.  We  picture  the  individual 
employer  discussing  with  the  individual  workman  the  job  in 
question,  each  trying  to  drive  a  good  bargain  in  typical  Amer- 
ican fashion.  But  openship,  so-called,  is  often  established,  not 
by  the  action  of  an  individual  employer,  but  by  the  decision  of 
an  employers'  association,  some  of  whose  members  may  even  be 
enjoined  by  court  action  from  exercising  their  individual  wills 
in  determining  relations  with  their  employees,  wthout  suffering 
severe  indemnities  to  the  association. 

Frequently,  the  employers'  association  supplies  individual 
contracts  to  its  members  with  instructions  not  to  hire  any  work- 
men who  refuse  to  sign  them.  A  typical  contract  of  this  nature 
reads  as  follows : 

I,  the  undersigned  in  consideration  of  the  signing  of  a  protection 
agreement   ...   do    hereby    agree    as   part    of   the   consideration    thereof: 

I  shall  not  directly  or  indirectly  counsel,  advise,  participate  or  aid  in 
the  declaration  of  any  strike  against  the  business  of  any  present  or  ftiture 
member  of  said  Association,  nor  in  the  establishment  or  continuance  there- 
of, nor  in  any  measure,  financial  or  otherwise,  designed  to  make  it  effec- 
tive. .  .  .'" 

A  part  of  such  individual  contract  or  a  supplementary  con- 
tract may  even  go  farther  in  limiting  the  activity  of  the  indi- 
vidual worker.  In  the  case  cited  above  one  form  of  contract, 
supplied  to  the  employers  by  the  association  with  instructions 
to  require  every  employee  to  sign  it,   read  in  part  as  follows : 

1"  H.  E.  Hoagiand,  Collective  Bargaining  in  the  Lithographic  Indus- 
try, P-   95-6. 


PROBLEiMS    OF    LABOR  251 

"You  represent  to  us  that  you  are  not  a  union  man  and  agree 
not  to  hereafter  join  any  union  without  our  written  consent."" 
Very  often  too  the  practice  of  open-shop  employers'  associa- 
tions in  maintaining  permanent  employment  bureaus  or  agencies 
creates  an  effective  bar  to  the  active  union  man.  In  speaking 
of  the  requirement  of  an  applicant  seeking  employment  through 
such  a  bureau  one  writer  who  is  in  sympathy  with  the  method 
says: 

He  is  required  to  give  a  complete  record  of  himself,  including  the 
reasons  why  he  left  the  shops  where  he  was  formerly  employed.  All  the 
facts  about  him  are  put  on  a  card  which  is  kept  in  a  permanent  card 
catalogue.  The  secretary  of  the  agency  makes  an  investigation  of  the 
man's  record.  ...  In  this  way  the  employers  find  out  who  the  dis- 
turbers  are,   and   they  are  kept   out   of   the  shops. '- 

These  examples  could  be  multiplied  man}'  times  to  show  that 
the  open  shop  is  not  always  free  to  all,  the  unionist  as  well  a.s 
the  non-unionist ;  and  that  on  the  other  hand  the  closed  shop 
is  not  always  kept  closed  by  the  use  of  force  or  some  form  of 
coercion.  Neither  is  it  true  tliat  all  shops  recognizing  the  union 
are  kept  open  by  the  union  nor  that  all  open  shops  are  closed 
to  union  members.  It  appears  quite  clear,  therefore,  that  we 
must  reject  the  classification  of  open  shop  and  closed  shop  if  we 
are  really  desirous  of  finding  names  which  are  accurately  de- 
scriptive. 

In  the  earl}-  history  of  unionism  in  this  country  the  terms 
open  shop  and  closed  shop  w^ere  not  used.  Then  shops  were 
either  "union"  or  "non-union":  union  if  the  organization  had  a 
voice  in  establishing  working  conditions ;  non-union  if  it  did 
not."  Occasionally  non-union  shops  were  designated  as  scab 
or  rat  shops  if  the  employer  kept  union  men  out.  For  the  most 
part  union  shops  were  open  to  non-unionist  as  well  as  to  union 
mem-bers  for  the  unions  of  those  early  days  had  a  naive  idea 
that  they  could  legislate  for  the  entire  trade,  w-hether  or  not 
they  controlled  the  supply  of  labor  in  the  trade. 

Gradually  the  unions  learned  the  necessity  of  bringing  pres- 
sure to  bear  upon  recalcitrant  employers  and  hence  they  began 
to  refuse  to  permit  their  members  to  work  in  shops  on  strike. 
The  "closed"  shop  was  one  closed  to  union  members.  It  be- 
came an  "open"  shop  when  the  union  declared  the  strike  off  and 
permitted  its  members  to  return  to  work.     Somewhat  later  the 

"  Ibid.,  p.    96. 

^  I.  F.  Marcosson,  in  IVorld's  Work,  vol.   11,  p.  6063. 

"  F.  T.   Stockton,   Closed  Shop  in  American    Trade   Unions,  p.    14. 


252  SELECTED   ARTICLES 

union,  upon  winning  a  strike,  stipulated  in  the  terms  of  peace 
that  tlie  shop  be  closed  to  non-unionists.  The  employers  seized 
this  conception  of  closed-shop  unionism  and  have  since  made 
it  the  chief  point  of  attack  in  their  anti-union  propaganda. 

The  publicity  given  to  the  open-shop  movement  of  the  past 
fifteen  years  has  made  it  appear  that  there  are  but  two  kinds  of 
shops  to  be  considered :  the  closed  shop  which  keeps  out  the  non- 
union workman,  and  all  othcr.s,  collectively  called  open  shops." 
At  the  time  the  terms  were  first  used  they  may  have  been  not 
far  from  accurate  in  their  description  of  existing  conditions. 
But  certainly  since  that  time  the  methods  used  by  some  of  the 
so-called  open-shop  employers'  associations  have  made  necessary 
a  new  classification  of  terms  to  fit  present  conditions.  The  Fed- 
eral Commission  on  Industrial  Relations  has  recognized  this 
need  and  it  is  interesting  to  note  that  the  one  resolution  which 
the  commission  adopted  by  unanimous  vote  read  as  follows : 

Whereas  the  commission  finds  that  the  terms  "open  shop"  and  "closed 
shop"  have  each  a  double  meaning,  and  should  never  be  used  without 
telling  which  meaning  is  intended,  the  double  meaning  consisting  in  that 
they  may  mean  either  union  or  non-union:  Therefore,  for  the  purposes 
of   this  report,   be   it 

Resolved,  That  the  Commission  on  Industrial  Relations  will  not  use 
the  terms  "open  shop"  and  "closed  shop"  but  in  lieu  thereof  will  use 
"union   shop"     and    "non-union   shop." 

The  union  shop  is  a  shop  where  the  wages,  the  hours  of  labor,  and 
the  general  conditions  of  employment  are  fi.xed  by  a  joint  agreement  be- 
tween   the   employer   and   the   trade    union. 

The  non-union  shop  is  one  where  no  joint  agreement  e.xists,  and  where 
the  wages,  the  hours  of  labor,  and  the  general  conditions  of  employment 
are   fixed   by   the   employer   without   cooperation    with    any   trade   union.'" 

This  distinction  is  essentially  that  made  by  trade  unionists 
themselves.  In  a  recent  editorial  in  the  Auierican  Federationist 
Mr.  Gompers  outlines  the  case  as  follows: 

When  an  employer  forms  a  treaty  with  the  union,  formal  or  tacit,  his 
shop  is  union,  even  if  the  union  consents  for  the  time  being  not  to  disturb 
any  non-union  men  among  the  employees.  If  the  employer  will  not  treat 
with  the  union  or  pay  the  union  scale,  his  shop  is  non-union  though  among 
its  employees  may  be  union  members.  The  deciding  point  as  to  whether 
a  force  of  employees  is  union  or  non-union  is  the  employer's  actual  recog- 
nition  of  union   regulations.'" 

Are  not  the  terms  union  shop  and  non-union  shop  more  accu- 
rately descriptive  than  the  terms  open  shop  and  closed  sliop? 
It  is  not  the  presence  of  imion  members  in  a  shop  that  is    im- 

><  The  open-shop  movement  has  attained  such  proportion  'hat  open- 
shop  schools  and  open-shop  employment  bureaus  are  very  common.  Open- 
shop  literature  is  voluminous  in  amoutit.  We  even  hear  of  Los  Angeles 
and  Washington  as  model  open-shop  cities. 

if  Final   Report   p.   265. 

^"American    Federationist,    vol.     17,    p.    885. 


PROBLEMS    OF   LABOR  253 

portant  but  rather  their  activity  in  securing  or  demanding  a  voice 
in  the  determination  of  the  conditions  under  which  they  work. 

Should  we  adopt  this  classification,  there  would  be  two  sets 
of  distinctions  to  be  kept  in  mind.  First,  that  between  the  union 
shop  and  the  non-union  shop:  the  union  shop  being  one  in 
which  the  union  is  a  party  to  the  wage  bargain  and  the  non- 
union shop  being  one  in  which  the  employer  refuses  to  deal  with 
labor  in  its  collective  capacity.  Thus  far  we  accept  the  classifica- 
tion suggested  by  the  trade  unionists.  But  there  is  a  second  dis- 
tinction, equally  important,  which  the  trade;  unionists  are  not  so 
ready  to  admit.  The  union  shop  may  be  either  closed  or  open. 
Most  unions  accept  the  principle  at  least  of  the  closed  union  shop. 
W'hether  or  not  they  insist  upon  its  enforcement  depends  upon 
expediency.  In  a  few  instances,  notably  in  the  transportation 
industry,  open  union  shop  seems  to  operate  fairly  successfully. 
Here  the  whole  competitive  field  is  covered  by  the  agreement. 
The  association  of  employers  and  the  union  fix,  by  joint  action, 
the  terms  of  employment  for  every  position  within  this  field, 
Vvhether  occupied  by  union  members  or  non-unionists.  The  con- 
ditions essential  to  the  success  of  the  open  union  shop  are:  (i) 
The  presence  of  a  strong  and  well  disciplined  organization  on 
each  side;  (2)  the  same  scale  of  work  and  wages  for  both  union- 
ist and  non-unionists;  and  (3)  the  settlement  of  all  complaints, 
whether  affecting  union  members  or  other  workmen,  by  joint 
action  of  representatives  of  the  union  and  the  employers'  asso- 
ciation. In  other  words  the  union  must  act  as  the  agent  of  all 
workers  and  must  be  protected  from  undercutting  by  non-mem- 
bers. 

The  non-union  shop  may  also  be,  temporarily  at  least,  either 
open  or  closed.  If  the  employer  does  not  fear  the  growth  of 
unionism,  he  may  not  discriminate  against  union  members  in 
hiring  workmen,  even  though  he  refuses  to  deal  with  them  as 
such.  On  the  other  hand  the  employer  may  choose  to  keep  union 
members  out  of  his  shop.  In  this  case  it  seems  that  the  only 
proper  term  to  apply  is  closed  non-union  shop."  The  employer 
is  generally  opposed  to  the  closed  union  shop  and  almost  never 
grants  it  voluntarily.  When  he  is  forced  to  grant  such  terms 
to  the  union  he  often  considers  the  agreement  merely  a  truce  to 

"  The  same  name  would  necessarily  be  applied,  of  course,  to  the  fhop 
which  is  temporarily  closed  to  union  members  by  the  union  itself  on  ac- 
count of  strike  or  other  disagreement  with  the  employer.  However,  these 
cases  are  relatively  rare  and  can  be  described  when  necessary  by  a  state- 
ment  of   the   conditions   surrounding   them. 


254  SELECTED   ARTICLE^.' 

be  broken  when  opportunity  offers.  The  temporary  locus  of  the 
balance  of  advantage  determines  whether  or  not  closed  union 
shop  shall  operate.  In  many  instances  prosperous  times  bring 
closed-union-shop  agreements.  In  succeeding  dull  periods  the 
aggressive  union  members  are  dismissed  and  the  remainder  give 
up  their  affiliation  in  return  for  the  retention  of  their  jobs. 

In  passing  judgment  upon  the  closed  union  shop  we  should 
distinguish  carefully  between  the  closed  union  shop  maintained 
by  the  open  union  and  that  maintained  by  the  closed  union.  01)- 
taining  membership  in  an  open  union  is  analogous  to  securing 
citizenship  papers  in  a  dcmocrac}'.  In  both  no  groups  are  ex- 
cluded except  those  Avhose  members  cannot  attain  the  standards 
set  for  the  entire  organization.  In  each  case  individuals  are  ex- 
cluded whose  past  conduct  has  been  inimical  to  the  welfare  of 
the  group.  And  in  both  the  democracy  and  the  open  union  quali- 
fied applicants  for  membership  are  admitted  as  soon  as  they 
satisfy  the  minimum  requirements  of  admission.  The  closed 
union  shop  maintained  by  the  open  union  has  many  supporters 
among  economists  and  other  members  of  the  so-called  third 
party  to  industrial  disputes." 

Closed  union  shop  maintained  by  a  closed  union,  on  the  other 
hand,  is  wholly  indefensible  from  the  standpoint  of  social  judg- 
ment. It  operates  for  the  benefit  of  the  few  and  those  few  not 
always  the  most  competent  or  the  most  deserving.  Trade  union- 
ists themselves  recognize  the  indefensibilit}'  of  such  a  situation 
and  for  the  most  part  deny  the  existence  of  the  closed  union.  It 
is  undoubtedly  true  that  the  practice  of  patrimony  to  keep  down 
the  numbers  in  a  trade  and  the  maintenance  of  prohibitive  initia- 
tion fees  or  other  artificial  restrictions  upon  the  entrance  of  com- 
petent workmen  into  a  given  industry  are  losing  ground  among 
tniion  leaders  themselves. 

Likewise  the  closed  non-union  shop  is  equally  indefensible 
unless  we  insist  upon  a  very  narrow  interpretation  of  the  sacred- 
ness  of  private  property  and  the  right  of  its  owner  to  do  with 
it  as  he  wills.  The  spy  systems  used  by  some  employers  not  only 
drive  out  of  emploj'ment  the  trouble  making  agitator,  but  they 
keep  all  workmen  in  a  state  of  mind  which  can  hardly  be  de- 

1'  Professor  Seligman,  for  example  after  expressing  himself  as  favor- 
able to  trade  unions,  says  that  unless  the  condition  described  here  as 
closed^  union  shop  is  maintained,  the  union  itself  will  often  cease  to  exist. 
Principles  of  Economics,  p.  441.  Professor  Fetter,  on  the  other  hand, 
opposes  closed  union  shop  in  any  case  and  relies  upon  public  sympathy  to 
secure  for  labor  higher  wages  when  necessary.  Principles  of  Economics, 
p.  250. 


PROBLEMS    OF    LABOR  255 

scribed  as  fitting  for  liberty  loving  citizens  of  a  free  country. 
Employers  agree  that  the  closed  non-union  shop  is  indefensible. 
At  least  they  are  accustomed  to  deny  its  existence.  It  has  been 
a  very  effective  weapon  in  the  hands  of  employers  who  have 
wished  to  establish  what  they  have  called  open  shop.  It  is 
harder  to  detect  than  the  closed  shop  maintained  by  the  closed 
union  for  its  success  depends  to  a  large  extent  upon  its  secrecy, 
other  pretexts  being  used  as  excuses  for  the  dismissal  of  active 
union  members. 

Open  shops,  whether  union  or  non-union,  are  essentially  un- 
stable. The  union  employees  continually  attempt  to  organize 
the  non-union  workers  and  to  establish  closed  union  shop.  The 
employer  is  equally  anxious  to  prevent  the  complete  unionization 
of  his  shop  and  will  often  resort  to  dismissal  of  active  unionists 
if  their  activity  seems  to  promise  success. 

In  conclusion,  the  writer  believes  that  because  our  present  use 
of  the  terms  open  shop  and  closed  shop  is  misleading  and  is  not 
accurately  descriptive  of  industrial  relations  in  modern  industrj', 
we  should  eliminate  these  terms  from  economic  discussions.  As 
substitute  terms  we  should  adopt  union  shop  to  describe  the  es- 
tablishment in  which  the  union  is  a  party  to  the  wage  bargain 
and  non-union  shop  to  describe  the  establishment  which  refuses 
to  deal  with  labor  organizations.  The  closed  union  shop  would 
then  correspond  to  what  is  now  called  the  closed  shop.  While 
to  avoid  the  confusion  which  arises  under  the  present  use  of  the 
term  open  shop,  we  would  use  three  terms,  open  union  shop, 
open  non-union  shop,  and  closed  non-union  shop,  according  to 
the  degree  of  recognition  given  the  union  by  the  employer  and 
the  extent  of  his  efforts  to  keep  union  members  out  of  his  es- 
tablishment. 


THE    COMMON    PEOPLE'S    UNION' 

One  of  the  most  interesting  and  perhaps  momentous  develop- 
ments of  this  momentous  time  is  the  "Middle  Class  Movement." 
It  is  a  very  recent  thing,  probably  starting  in  North  Germany 
early  in  the  present  year,  when  the  professional  men  of  certain 
towns  banded  together  against  the  threatened  "proletarian  dic- 
tatorship" of  Spartacide  workingmen  and  brought  the  revolu- 
tionary laborites  to  terms  by  threats  of  a  bourgeois  "counter- 

*  By    Lothrop    Stoddard       World's    Work.      39:102-4.    November,    1919- 


256  SRLECTKD   ARTICLES 

strike."  That  first  revelation  of  middle  class  power  was  not 
destined  to  remain  an  isolatt'd  phenomenon.  During  the  suc- 
ceeding months  distinctly  middle  class  movements  have  appeared 
in  ever}'  quarter  of  the  globe.  Even  far-off  South  America  and 
Japan  to-day  have  their  stirrings  of  middle  class  self-conscious- 
ness, while  as  far  back  as  last  April,  England  saw  the  formation 
of  a  "Aliddle  Classes'  Union"  and  has  ever  since  played  the  lead- 
ing role  in  the  middle  class  cause. 

The  reason  for  this  nascent  middle  class  solidarity  is  per- 
fectly clear.  It  is  a  defensive  reaction  against  the  rapidly  in- 
creasing pressure  of  the  high  cost  of  living.  The  sky-rocketing 
of  prices  has  of  course  hit  all  classes  of  society,  but  the  middle 
classes  have  unquestionably  been  hit  the  hardest.  It  is  they  who 
have  been  the  war's  greatest  sufferers.  And  furthermore  it 
must  not  be  forgotten  that  the  war  merely  intensified  a  process 
which  had  been  going  on  for  many  years.  Ever  since  the  closing 
years  of  the  Nineteenth  Century  prices  have  been  rising  rapidly. 
When  the  war  broke  out  in  1914  prices  were  almost  double 
what  they  had  been  twenty  years  before.  The  war  immensely 
accelerated  this  upward  progress.  The  five  years  after  1914  saw 
a  further  doubling  of  prices-  a  five-year  rise  as  great  as  that  of 
the  previous  twenty  years. 

Of  course  this  hurts  everybody.  But  note  how  superlatively 
it  hurts  the  middle  classes.  "The  middle  classes"  is  a  somewhat 
clastic  term,  but  it  has  been  well  defined  by  one  of  the  leaders 
of  the  English  middle  class  movement  as  "the  people  with  the 
middle  interests."  The  middle  classes  are  composed  preemi- 
nently of  salaried  persons  and  those  deriving  moderate  incomes 
from  "safe"  investments,  annuities,  pensions,  and  the  like.  Now 
it  is  precisely  these  things  wliich  have  lagged  farthest  behind 
prices.  Both  capital  and  labor,  being  self-conscious  and  w^ell 
organized,  have  managed  to  keep  fairly  well  up  with  the  pro- 
cession; indeed,  to  certain  sections  of  both,  the  war-years  in 
particular  have  yielded  a  harvest  of  speculative  profits  and 
fancy  wages  which  to-day  put  them  ahead  of  the  game.  But 
the  middle  class  man  is  generally  in  very  evil  plight.  Salaries 
show  none  of  the  buoyancy  of  wages  and  tend  to  remain  an- 
chored to  the  schedules  fixed  during  the  relatively  stable  price- 
level  of  a  generation  ago.  When  we  come  to  the  matter  of  in- 
comes, the  situation  is  even  worse. 

Consider  the  present  plight  of  a  typical  middle-class  family 
which  had  lived  comfortably  within  its  income  in  the  vear  1806 


PROBLEMS    OF    LABOR  257 

and  had  then  thriftily  invested  a  few  hundred  dollars  annually 
in  "gilt-edged"  securities  (bonds  or  preferred  stock),  savings- 
bank  deposits,  long-term  life  insurance  endov;ment  policies,  and 
the  like.  Perhaps  there  was  also  a  government  pension  to  the 
grandfather,  a  Civil  War  veteran,  a  small  annuity,  or  similar 
supplementary  source  of  income.  The  head  of  the  house,  of 
course,  a  salaried  man.  Now  what  is  the  condition  of  that 
family  to-day?  To  begin  with,  it  costs  just  three  times  as  much 
to  maintain  its  1896  standard  of  living.  The  family  will  certainly 
cling  desperately  to  that  standard,  for,  while  comfortable,  it  was 
not  extravagant  and  was  based  upon  deep-seated  traditions  and 
ideals.  Yet  how  pay  the  threefold  bills?  The  main  source  of 
income — the  salary,  has  increased  in  nothing  like  a  threefold 
proportion.  The  "gilt-edged"  securities  bring  no  increased  divi- 
dends, stand  very  low  on  the  'change,  and,  if  "railroads,"  may  be 
almost  worthless.  In  fact,  every  dollar  owned  by  that  family  in 
1896,  whether  invested  in  bonds,  stocks,  savings-bank  deposits, 
insurance  policies,  annuities,  or  pensions,  has  depreciated,  in 
actual  purchasing  power,  to  thirty-five  cents,  and  every  dollar 
invested  in  1914  has  depreciated  to  fifty  cents.  Furthermore, 
the  war  has  imposed  heavy  collateral  burdens,  as  increased  tax- 
;ition,  notably  income-tax.  Lastlj^  the  current  wave  of  social 
unrest,  witli  its  especial  hostility  to  private  property  and  its 
especial  hatred  of  the  middle  classes,  tends  further  to  unsettle 
confidence  and  depress  values. 

Such  is  the  condition  of  the  middle  classes  throughout  the 
world  to-day. 

"Middle  Classes'  Union"  in  England 

England  having  been  the  country  w"here  middle  class  feel- 
ing and  the  necessity  for  middle  class  action  were  first  appre- 
ciated, it  is  not  strange  to  find  England  taking  the  lead  in  the 
current  middle  class  movement.  The  English  movement  was 
formally  laimched  in  April,  IQ19,  when  a  convention  was  held 
in  London  to  inaugurate  the  formation  of  a  "Aliddle  Classes' 
Union."  The  chairman,  Mr.  Kennedy  Jones,  stated  in  his 
opening  address  that  the  organization  was  to  be  formed  to  ob- 
tain protection  for  those  members  of  the  community  who 
could  in  no  other  way  protect  their  domestic  and  political 
interests.  "If  you  are  properly  organized,"  concluded  Mr. 
Tones,  "you  will  become  the  greatest  force  in  the  nation.  You 
can   possibly  hold   up   all   the   workers,   you   could   hold    up   the 


258  SELECTED   ARTICLES 

capitalists,  or  you  could  even  hold  up  the  Government.  You 
must  see  you  are  not  squeezed  or  crushed  and  that  you  are 
placed  in  such  a  position  as  will  necessitate  a  fair  and  square 
deal  in  all  things,  and  the  right  to  live."  The  meeting  adopted 
a  constitution,  its  preamble  stating:  "We  are  being  taxed 
out  of  existence.  We  are  being  exploited  for  the  benefit  of 
the  lower  classes  or  for  the  benefit  of  the  financial  groups  and 
profiteers  in  the  upper  classes."  The  Union's  aims  were  thus 
officially  stated  in  its  constitution : 

To  promote  mutual  understanding  between  all  classes  of  the  com 
munity   and   secure   an   equitable   distribution   of   national   taxation. 

To  obtain  the  removal  of  unfair  burdens  on  the  middle  classes,  and  to 
enable  them  by  collective  action  to  protect  their  interests  from  legislative 
or  industrial  oppression. 

To  scrutinize  and  watch  all  legislation  and  administration,  and  to 
secure  suitable  amendments  of  the  law  where  the  interests  of  the  middle 
classes  are  unfairly  prejudiced. 

To  support,  by  legal  action  if  necessary,  the  interests  of  any  member 
which    raise   questions   of   general   principle   affecting  the   middle  classes. 

This  formal  pronouncement  was  elaborated  in  the  official 
statement  of  Captain  Stanley  Abbott,  General  Secretary  of  the 
Union,  who  said:  "The  Middle  Classes'  Union  is  not  concerned 
with  social  distinctions  or  religious  variations.  What  it  is  con- 
cerned with  is  the  interests  which  exist  between  those  of  Cap- 
ital and  those  of  Labor.  In  this  sense  the  Middle  Classes  arc 
the  people  with  the  Middle  Interests.  In  political  and  economi" 
affairs  there  are  three  main  sections;  two  of  them  are  the  ex- 
tremists-call them  what  you  will— the  Upper  and  the  Lower, 
the  Right  and  the  Left,  the  Monopolist  and  the  Syndicalist.  The 
third  is  the  Middle  Classes.  And  it  is  for  the  individual  to  de- 
termine whether  he  or  she  comes  within  this  section — as  a  con- 
sumer, as  a  taxpayer,  as  a  law-maker.  Capital  is  organized  for 
self-preservation  Labor  is  organized  for  self-advancement. 
Rut  in  the  operations  as  between  these  two  sections,  the  other — 
the  unorganized  Middle — the  section  which  is  the  butt,  the 
buffer,  and  the  burden-bearer  when  Capital  and  Labor  are  con- 
tending— has  no  locus  standi  and  no  representation.  Within 
this  body  are  the  brain-workers — the  commercial  and  trading, 
the  professional  and  administrative  and  managerial  classes,  and 
those  whose  income  is  derived  from  pensions  or  savings.  Self- 
analysis  should  indicate  one's  place.  The  domestic  or  internal 
interests  of  a  particular  profession  or  business  may  be  served 
by  the  profession  or  business  societies;  but,  so  far  as  general 
political  and  economic  questions  are  concerned,  those  who  con- 
stitute these  bodies,  together  with  the  vast  mass  of  the  middle 


p:roblems  of  labor  259 

classes  who  are  not  attached  to  or  identified  with  any  such 
speciahzed  organization,  are  incapable,  under  present  conditions, 
of  any  power  of  concerted  action.  The  M.  C.  U.  exists  to  weld 
together  those  unorganized  and  unrepresented  middle  classes 
into  a  strong,  practical,  coordinated  entity  for  the  protection  of 
common  interests.  The  very  existence  of  a  representative  and 
powerful  organization  such  as  this  will  produce  a  moderating 
and  a  stimulating  influence  in  the  political  and  economic  life  of 
the  nation." 

In  the  comparatively  short  period  since  its  inauguration  the 
English  jNIiddle  Classes'  Union  has  been  conducting  an  active 
campaign  and  appears  to  be  meeting  with  a  good  measure  of 
success. 

Unions  of  the  Professions 

England  seems  to  be  the  only  country  where  a  general  middle 
class  organization  for  general  ends  has  as  yet  been  formally  at- 
tempted. But  in  a  number  of  countries  in  different  parts  of  the 
world,  including  England  itself,  middle  class  organizations  of 
single  professions  or  allied  callings  looking  toward  the  protec- 
tion and  betterment  of  their  special  circles  are  to-day  in  opera- 
tion. I  have  already  mentioned  the  middle  class  organizations 
of  North  Germany  which  may  be  considered  the  pioneers  of 
the  movement.  These  organizations  sprung  spontaneously  into 
being  in  several  North  German  cities  early  in  the  present  year 
when  Spartacides  (i.  e.,  German  Bolsheviki)  had  acquired  local 
control.  But  the  oppressed  boui-geois  presently  took  the  "class 
solidarity"  leaf  out  of  the  Spartacides'  book;  at  least,  the  mem- 
bers of  the  allied  group  of  professions  connected  with  the  public 
health  took  such  action.  The  amalgamated  doctors,  nurses, 
hospital  attendants,  pharmacists,  civic  health  officials,  and  kin- 
dred callings  declared  "counter  strikes,"  and  sick  proletarians 
could  thenceforth  obtain  neither  drugs  nor  medical  attendance, 
while  proletarian  patients  were  left  unattended  in  their  beds. 
So  effective  was  this  action  of  only  a  part  of  the  middle  classes 
that  in  at  least  two  cities  the  Spartacides  were  forced  to  terms 
without  any  aid  having  been  extended  the  counter  strikers  by 
the  Federal  troops. 

The  United  States  has  not  yet  witnessed  a  middle  class  union 
of  the  general  type,  but  local  organizations  of  single  professional 
and  business  callings  have  already  begun.  For  instance,  toward 
the   end  of   August   a   union   of  clerks   and  other  salaried   em- 


26o  SELECTED   ARTICLES 

ployees  was  formed  at  New  Orleans  for  mutual  protection  and 
for  the  raising  of  salaries,  which,  unlike  laborers'  wages  had 
either  advanced  very  slowly  or  had  remained  at  an  absolute 
standstill.  The  new  organization  declared  that  clerks  and  other 
salaried  men  who  were  able  to  support  their  families  in  comfort 
and  even  lay  aside  savings  only  a  few  years  ago  now  found 
themselves  hard  pushed  to  obtain  the  bare  necessaries  of  life, 
and  that  therefore  an  immediate  amelioration  of  their  eco- 
nomic condition  was  imperative.  And  an  investigator  just  re- 
turned from  the  Aliddle  West  reports  widespread  interest  in 
what  he  calls  "white  collar"  unions. 

"In  every  city,"  he  says,  "I  heard  much  talk  of  the  impending 
organization  of  the  'white  collar'  occupations  on  a  labor-union 
basis.  I  did  not  find  that  any  important  movement  in  this  direc- 
tion had  been  set  on  foot  anywhere  in  the  Middle  West,  but  in 
talking  with  clerks,  stenographers,  newspaper  men,  and  others 
employed  on  salaries  I  found  them  intensely  curious  as  to  what 
had  been  done  in  that  direction  in  the  East.  Newspaper  men 
were  eager  to  learn  about  the  unionizing  of  the  news  writers 
of  Boston  and  other  cities.  Many  had  heard  of  the  Union  of 
University  Professors  and  its  affiliation  with  the  American  Fed- 
eration of  Labor  and  were  disappointed  when  I  could  not  give 
them  details.  There  was  much  interest  in  the  Union  of  Federal 
Employees.  But  to  most  of  these  office  workers,  what  had 
dramatized  for  them  the  idea  of  a  union  of  'white  collar'  occu- 
pations was  the  actors'  strike. 

"  'We've  been  thinking  we  were  different,  somehow,  from 
the  men  in  the  pressroom  and  composing  room,'  said  an  intelli- 
gent young  woman  stenographer  in  a  newspaper  office.  'But  I 
notice  every  time  they  ask  for  more  pay  they  get  it,  and  if  E.  H. 
Sothern  and  Marie  Dressier  aren't  too  proud  to  belong  to  a 
union,  why  should  we  be?  The  boss  thinks  he's  treating  us 
prettv  well,  giving  us  a  50  per  cent  increase  in  salary.  But  in 
his  own  paper  the  other  day  he  printed  the  figures  that  show 
the  cost  of  food  and  clothing  here  in  Cleveland  has  gone  up 
80  per  cent.,  and  my  rent's  been  doubled.  And  so  has  the  price 
of  the  paper  and  the  profits.'  " 

From  all  this  the  lesson  seems  to  be  clear.  Throughout  the 
world  the  middle  classes  are  less  adjusted  to  rising  price  levels 
than  arc  either  the  upper  or  the  lower  strata  of  society.  They 
are  consequently  suffering  more  than  any  other  class.     They  arc 


PROBLEMS   OF   LABOR  261 

beginning  to  see  the  benefits  obtained  by  other  classes  through 
cooperation  and  are  rapidly  overcoming  the  handicaps  which 
have  hitherto  prevented  them  from  initiating  corporate  action. 
Now  that  such  action  has  actually  begun  in  many  quarters  and 
has  apparently  been  both  feasible  and  successful,  it  would  seem 
as  though  a  rapid  development  of  middle  class  activity  would 
characterize  the  immediate  future. 


THE   UNION   LABEL' 

The  union  label — what  does  it  mean?  That  is  a  question 
often  asked,  and  it  receives  a  variety  of  answers.  In  order, 
therefore,  to  get  it  properly  before  the  public  it  becomes  neces- 
sary to  make  application  of  the  principle  involved  in  its  use  in 
other  directions  than  from  the  standpoint  of  the  union  man. 

Churches  organize,  adopt  names  and  creeds  of  faith  and  re- 
fuse to  tolerate  any  infringement  upon  their  right  to  worship 
according  to  their  standard  of  faith  and  practice.  This  the 
union  label  does  for  the  union  workmen. 

Clubs  and  associations  adopt  the  insignia  and  recognition  to 
prevent  fraud  and  imposition.  This  is  the  mission  of  the  union 
label. 

Firms  and  corporations  have  distinguishing  marks  which 
they  jealously  guard  and  protect.  So  does  the  organized 
worker  guard  and  protect  the  union  label. 

Authors  and  writers  secure  copyrights  as  a  shield  from 
plagiarism  of  the  products  of  their  brain  and  pen.  The  union 
workman  uses  the  label  as  a  shield  for  the  product  of  his  labor 
and  brawn. 

Inventors  secure  letters  patent  to  prevent  infringement  upon 
their  right.  The  union  label  serves  the  same  purpose  for  or- 
ganized labor. 

The  manufacturer  places  his  trade  mark  on  the  products  of 
his  shop  or  factory.  The  label  performs  the  sam.e  service  for 
the  Avorker  who  brings  forth  these  products. 

It  therefore  seems  plain  that  the  same  law  which  steps  in 
and  protects  those  whose  interests  lie  in  the  various  arteries  of 
trade  and  commerce  should  step  in  and  protect  the  worker  in 
the  use  of  his  distinguishing  mark. 

1  Amalgamated  Journal.     March   27,    1919. 


26i  SELECTED   ARTICLES 

THE   INCORPORATION   OF  TRADES    UNIONS' 

Lest  what  I  say  on  the  advisability  of  incorporating  trade 
unions  be  misunderstood,  it  seems  wise  to  state  at  the  outset  my 
views  of  tlieir  value  to  the  community. 

They  have  been  largely  instrumental  in  securing  reasonable 
hours  of  labor  and  proper  Conditions  of  work;  in  raising  ma- 
terially the  scale  of  wages,  and  in  protecting  women  and  chil- 
dren from  industrial  oppression. 

The  trade  unions  have  done  this,  not  for  the  workingmen 
alone,  but  for  all  of  us;  since  the  conditions  under  which  so 
large  a  part  of  our  fellow  citizens  work  and  live  will  determine, 
in  great  measure,  the  future  of  our  country  for  good  or  for 
evil. 

This  improvement  in  the  condition  of  the  workingmen  has 
been  almost  a  net  profit  to  the  community.  Here  and  there 
individuals  have  been  sacrificed  to  the  movement;  but  the  in- 
stances have  been  comparatively  few,  and  the  gain  to  the  em- 
ployees has  not  been  attended  by  a  corresponding  loss  to  the 
employer.  In  many  instances,  the  employer's  interests  have  been 
directly  advanced  as  an  incident  to  improving  the  conditions  of 
labor;  and  perhaps  in  no  respect  more  than  in  that  expressed 
by  a  very  wise  and  able  railroad  president  in  a  neighboring 
State,  who  said:  "I  need  the  labor  union  to  protect  me  from 
my  own  arbitrariness." 

It  is  true  that  the  struggle  to  attain  these  great  ends  has 
often  been  attended  by  intolerable  acts  of  violence,  intimidation 
and  oppression;  but  the  spirit  which  underlies  the  labor  move- 
ment has  been  essentially  noble.  The  spirit  which  subordinates 
the  interests  of  the  individual  to  that  of  the  class  is  the  spirit 
of  brotherhood — a  near  approach  to  altruism;  it  reaches  pure 
altruism  when  it  involves  a  sacrifice  of  present  interests  for 
the  welfare  of  others  in  the  distant  future. 

Modern  civilization  affords  no  instance  of  enlightened  self- 
sacrifice  on  so  large  a  scale  as  that  presented  when  great  bodies 
of  men  calmly  and  voluntarily  give  up  steady  work,  at  satis- 
fctory  wages  and  under  proper  conditions,  for  the  sole  reason 
that  the  employer  refuses  the  recognition  of  their  union,  which 
they  believe  to  be  essential  to  the  ultimate  good  of  the  working- 
man.    If  you  search  for  the  heroes  of  peace,  you  will  find  many 

1  By   Louis   D.    Brandeis.      Addreii    delivered   to   the    Economic   Cluh   of 
Boston,  December  4.  1903. 


PROBLEMS   OF   LABOR  263 

o£  them  among  those  obscure  and  humble  workmen  who  have 
braved  idleness  and  poverty  in  devotion  to  the  principle  for 
which  their  union  stands. 

And  because  the  trade  unions  have  accomplished  much,  and 
because  their  fundamental  principle  is  noble,  it  is  our  duty, 
where  the  unions  misconduct  themselves,  not  to  attack  the 
unions,  not — ostrich-like — to  refuse  to  recognize  them,  but  to 
attack  the  abuses  to  which  the  unions,  in  common  with  other 
human  institutions,  are  subject,  and  with  which  they  are  af- 
flicted; to  remember  that  a  bad  act  is  no  worse,  as  it  is  no 
better,  because  it  has  been  done  by  a  labor  union  and  not  by 
a  partnership  or  a  business  corporation.  If  unions  are  lawless, 
restrain  and  punish  their  lawlessness ;  if  they  are  arbitrary,  re- 
press their  arbitrariness ;  if  their  demands  are  unreasonable  or 
unjust,  resist  them;  but  do  not  oppose  the  unions  as  such. 

Now,  the  best  friends  of  labor  unions  must  and  should 
admit  that  their  action  is  frequently  hasty  and  ill-considered, 
the  result  of  emotion  rather  than  of  reason ;  and  that  their  ac- 
ion  is  frequently  arbitrary,  the  natural  result  of  the  possession 
of  great  power  by  persons  not  accustomed  to  its  use ;  and  that 
the  unions  frequently  ignore  laws  which  seem  to  hamper  them 
in  their  efforts,  and  which  they  therefore  regard  as  unjust. 
For  these  defects,  being  but  human,  no  complete  remedy  can 
be  found ;  but  the  incorporation  of  labor  unions  would,  among 
other  things,  tend  in  some  measure  to  correct  them. 

The  general  experience  in  this  country,  in  respect  at  least  to 
the  great  strikes,  has  been  that  success  or  failure  depended 
mainly  upon  whether  public  opinion  was  with  or  against  the 
strikers.  Nearly  every  American  who  is  not  prejudiced  by  his 
own  peculiar  interests  recognizes  the  value  of  labor  unions. 
Nearly  every  American  who  is  not  himself  financially  interested 
in  a  particular  controversy  sympathizes  thoroughly  with  every 
struggle  of  the  workingmen  to  better  their  own  condition.  But 
this  sympathy  for  the  workingmen  is  quickly  forfeited  when- 
ever the  conduct  of  the  strikers  is  unreasonable,  arbitrary,  law- 
less or  unjust.  The  American  people  with  their  common  sense, 
their  desire  for  fair  play  and  their  respect  for  law,  resent  such 
conduct.  The  growth  and  success  of  labor  unions,  therefore, 
as  well  as  their  usefulness  to  the  community  at  large,  would  be 
much  advanced  by  any  measures  which  tend  to  make  them  more 
deliberate,  less  arbitrary,  and  more  patient  with  the  trammels 
of   a  civilized   community.     They  need,   like  the  wise  railroad 


26(  SKlJiCTKD    ARTICLES 

president  to  wlioni  I  referred,  something  to  protect  them  from 
their  own  arbitrariness.  The  employer  and  the  community  also 
require  this  protection.  Incorporation  would  in  some  measure 
help  to  this  end. 

When,  in  the  course  of  a  strike,  illegal  acts  are  committed, 
such  as  acts  of  violence  or  of  undue  oppression,  the  individual 
committing  the  wrong  is,  of  course,  legally  liable.  If  the  act  is 
a  crime,  the  perpetrator  may  be  arrested  and  punished;  if  it  is 
a  mere  trespass,  he  may  be  made  to  pay  damages,  provided  he 
is  financially  responsible;  and  if  money  damages  appear  not  to 
be  an  adequate  remedy  injunction  against  the  wrongful 
acts  may  be  granted  by  a  court  of  equity.  If  the  injunction  is 
disobeyed,  the  defendant  may  be  imprisoned  for  contempt. 

Now,  it  seems  to  be  a  common  belief  in  this  country  that 
while  tlie  Individual  may  be  thus  proceeded  against  in  any  of 
tliese  ways,  the  labor  union,  as  such,  being  unincorporated,  that 
is,  being  a  mere  voluntary  association,  cannot  be  made  legally 
responsible  for  its  ads.  The  rules  of  law  established  by  the 
courts  of  this  country  afford,  it  is  true,  no  justification  for  this 
oi)inion.  .\  union,  althou'jh  a  voluntary  unincorporated  associa- 
tion, is  legally  responsible  for  its  acts  in  much  the  same  way 
tliat  an  individual,  a  partnership  or  a  corporation  is  responsible. 
If  a  union,  through  its  constituted  agents,  commits  a  wrong, 
or  is  guilty  of  violence  or  of  illegal  oppression,  the  union,  and 
not  merely  the  individuals  who  are  the  direct  instruments  of  the 
wrong,  can  be  enjoined  or  made  liable  for  damages  to  the  same 
extent  that  the  union  cmild  be  if  it  were  incorporated;  and  the 
funds  belonging  to  the  unincorporated  union  can  be  reached 
to  satisfy  any  damages  which  might  be  recovered  for  the  wrong 
(l.,n(.  Tlie  Taff  Vale  Railway  case,  decided  last  year  in  Eng- 
land, in  whicli  it  was  held  the  Amalgamated  Society  of  Rail- 
way Servants  could,  as  a  union,  be  enjoined  and  be  made  liable 
in  damages  for  wrongs  perpetrated  in  the  course  of  a  strike, 
created  consternation  among  labor  unions  there,  but  it  laid  down 
no  principle  of  law  new  to  this  country. 

Numerous  instances  may  be  found  in  our  courts  where  labor 
tuiions  have  been  enjoined,  and  in  our  own  State,  more  than 
thirty  years  ago,  an  action  was  maintained  against  a  union  for 
urong fully  extorting  from  an  employer  a  penalty  for  having 
used  the  product  of  "scab"  labor.  But  while  the  rules  of  legal 
liability  apply  fully  to  the  unions,  though  unincorporated,  it  is, 
as  a  practical  matter,  more  difficult  for  the  plaintiff  to  conduct 


PROBLEMS    OF   LABOR  265 

the  litigation,  and  it  is  particularly  difficult  to  reach  the  funds 
of  the  union  with  which  to  satisfy  any  judgment  that  may  be 
recovered.  There  has  consequently  arisen,  not  a  legal,  but  a 
practical  immunity  of  the  unions,  as  such,  for  the  most  wrongs 
committed. 

This  practical  immunity  of  the  unions  from  legal  liability  is 
deemed  by  many  labor  leaders  a  great  advantage.  To  me  it  ap- 
pears to  be  just  the  reverse.  It  tends  to  make  officers  and  mem- 
bers reckless  and  lawless,  and  thereby  to  alienate  public  sym- 
pathy and  bring  failure  upon  their  efforts.  It  creates  on  the 
part  of  the  employers,  also,  a  bitter  antagonism,  not  so  much 
on  account  of  lawless  acts  as  from  a  deeprooted  sense  of  in- 
justice, arising  from  the  feeling  that  while  the  employer  is  sub- 
ject to  law,  the  union  holds  a  position  of  legal  irresponsibility. 

This  practical  immunity  of  the  labor  unions  from  suit  or 
legal  liability  is  probably  largely  responsible  for  the  existence 
of  the  greatest  grievances  which  labor  unions  consider  they  have 
suffered  at  the  hands  of  the  courts ;  that  is,  the  so-called  "gov- 
ernment by  injunction."  It  has  come  about  in  this  way:  An  act 
believed  to  be  illegal  is  committed  during  a  strike.  If  that  act 
is  a  crime,  a  man  may  be  arrested,  but  in  no  case  can  he  be  con- 
victed of  a  crime  except  on  proof  beyond  a  reasonable  doubt 
and  a  verdict  of  the  jurj',  and  on  every  jury  there  is  apt  to  be 
some  one  favorable  to  the  defendant.  Many  acts,  however,  may 
be  illegal  which  are  not  criminal,  and  for  these  the  only  remedy 
at  law  is  a  civil  action  for  damages ;  but  as  the  defendant  is 
usually  financially  irresponsible,  such  action  would  afford  no 
remedy. 

The  courts,  therefore,  finding  acts  committed  or  threatened, 
£or  which  the  guilty  parties'  cannot  be  punished  as  for  a  crime, 
and  cannot  be  made  to  pay  damages  by  way  of  compensation, 
liave  been  induced  to  apply  freely,  perhaps  too  freely,  the  writ 
of  injunction.  They  have  granted,  in  manj^  instances,  this  writ 
according  to  the  practices  of  the  court  of  equity  upon  prelimi- 
nary application,  wholly  ex  parte,  and  upon  affidavits,  without 
any  chance  of  cross-examination.  If  the  courts  had  been  deal- 
ing with  a  responsible  union  instead  of  with  irresponsible  de- 
fendants, they  would,  doubtless  in  many  of  the  cases,  have  re- 
fused to  interfere  by  injunction  and  have  resolved  any  doubts 
in  favor  of  the  defendants  instead  of  the  plaintiffs. 

In  another  respect,  also,  this  practical  immunity  of  the  unions 
has  been  very  dearly  bought :   Nearly  every  large  strike  is  at- 


266  SELECTED   ARTICLES 

tended  by  acts  of  flagrant  lawlessness.  The  employers,  and  a 
large  part  of  the  public,  charge  these  acts  to  the  unions.  In 
very  many  instances  the  unions  are  entirely  innocent.  Hood- 
lums, or  habitual  criminals,  have  merely  availed  themselves  of 
a  convenient  opportunity  for  breaking  the  law,  in  some  instances 
even  incited  thereto  by  employers  desiring  to  turn  public  opinion 
against  the  strikers.  What  an  immense  gain  would  come  to  the 
unions  from  a  full  and  fair  trial  of  such  charges  if  the  inno- 
cence of  the  unions  were  established,  and  perhaps  even  the  guilt 
of  an  employer!  And  such  a  trial  would  almost  necessarily  be 
had  before  a  jury,  upon  oral  testimony,  with  full  opportunity 
of  cross-examination;  whereas  now,  nearly  every  important 
adjudication  involving  the  alleged  action  of  unions  is  made 
upon  application  to  a  judge  sitting  alone;  and  upon  written 
affidavits,  without  the  opportunity  of  cross-examination. 

It  has  been  objected  by  some  of  the  labor  leaders  that  in- 
corporation of  the  unions  would  expose  to  loss  the  funds  which 
have  been  collected  as  insurance  against  sickness,  accident  and 
enforced  idleness;  that  these  funds  might  be  reached  to  satisfy 
claims  made  for  wrongs  alleged  to  have  been  committed  by  the 
union.  I  can  conceive  of  no  expenditure  of  money  by  a  union 
which  could  bring  so  large  a  return  as  the  payment  of  compen- 
sation for  some  wrong  actually  committed  by  it.  Any  such  pay- 
ment would  go  far  in  curbing  the  officers  and  members  of  the 
union  from  future  transgression  of  the  law,  and  it  would,  above 
all,  establish  the  position  of  the  union  as  a  responsible  agent  in 
the  community,  ready  to  abide  by  the  law.  This  would  be  of 
immense  advantage  to  the  union  in  all  its  operations. 

Again,  it  has  been  urged  that  the  incorporation  of  tlie  union 
would  lead  to  a  multiplication  of  lawsuits,  which  would  involve 
the  union  in  great  expense;  but  the  expense  of  conducting  such 
litigation  would  be  insignificant  as  compared  with  the  benefits 
which  would  result  to  the  union  from  holding  a  recognized  and 
responsible  position  in  the  community. 

Again,  it  has  been  urged  that  the  unions  would  not  fear  liti- 
gation if  justice  were  promptly  administered;  but  that  it  was  the 
dragging  out  of  litigation  which  was  to  be  apprehended.  I  take 
it  that,  so  far  as  the  unions  have  suffered  from  the  administra- 
tion of  the  law,  it  has  not  been  from  delays  but  from  pre- 
cipitancy. They  have  suffered  at  times  in  the  granting  of  pre- 
liminary injunctions,  injunctions  which  have  been  more  readily 
granted  because  of  the  irresponsible  position  of  the  defendants. 


PROBLEMS   OF   LABOR  267 

Again,  it  has  been  urged  that  the  unions  might  be  wiHing  to 
submit  themselves  readily  to  suit  if  the  rules  of  law,  as  now  ad- 
ministered by  the  courts,  were  not  unjust  to  labor.  I  am  in- 
clined to  think  that  there  have  been  rendered  in  this  country 
many  decisions  which  do  unduly  restrict  the  activity  of  the 
unions.  But  the  way  to  correct  the  evil  of  an  unjust  decision  is 
not  to  evade  the  law  but  to  amend  it.  The  unions  should  take 
the  position  squarely  that  they  are  amendable  to  law,  prepared 
to  take  the  consequences  if  they  transgress,  and  thus  show  that 
they  are  in  full  sympathy  with  the  spirit  of  our  people,  whose 
political  system  rests  upon  the  proposition  that  this  is  a  govern- 
ment of  law,  and  not  of  men. 


LABOR   DISPUTES    AND    ADJUSTMENT 

THE  CAUSE  OF   STRIKES^ 

There  are  few  signs  in  the  world  at  present  of  the  coming 
of  that  "brotherhood  of  the  classes"  which  some  prophets  fore- 
told as  the  result  of  the  war  for  democracy.  From  almost  every 
country  comes  news  of  labour  imrest  on  a  large  scale,  and  from 
most  countries  of  serious  strikes  often  developing  into  civil  dis- 
turbances. It  is,  of  course,  easy  to  exaggerate  the  significance 
of  such  movements,  whose  precise  importance  the  continued 
activity  of  the  various  censorships  makes  it  very  difficult  to 
ascertain.  But  enough  reliable  information  comes  through  to 
make  it  certain  that  revolution  is  at  least  a  possibility  in  certain 
of  the  most  important  Allied  countries. 

The  plain  fact  is  that  all  over  Europe,  and  to  an  increasing 
extent  in  America  also,  the  armies  are  mobilising  for  something 
like  a  class  war.  Economic  movements  have  a  rapidly  growing 
tendency  to  become  political,  not  onh'  because  the  workers 
possess  a  greatly  increased  power  and  are  far  more  conscious  of 
it,  but  also  because  their  economic  claims  are  animated  by  a 
steadily  deepening  hostilit}-  to  the  whole  capitalist  order  of 
society.  Not  only  do  the  workers  feel  stronger,  they  have  also 
a  growing  feeling  that  capitalism  is  insecure.  The  greatest 
barrier  to  labour  unrest  before  the  war  was  the  widespread  con- 
viction that  capitalism  was  inevitable — that  it  had  been  in  pos- 
session ever  since  the  workers  could  remember,  and  that  there 
were  no  signs  that  it  was  likely  to  come  to  an  end.  To-day 
the  world,  and  the  workers  perhaps  most  of  all,  has  lost  the 
feeling  of  certainty  about  anvthing.  We  have  come  through 
such  changes  already  that  no  change  for  better  or  worse  now 
seems  altogether  impossible.  Empires,  apparently  strong  and 
impregnable,  have  perished  almost  in  a  night;  new  nations  have 
arisen;  two  great  countries  are  actually  governed  by  extreme 
Socialists,  and  several  others  by  Socialists  of  a  milder  type. 
After  the  fall  of  the  Habsburgs,  the  Hohenzollerns  and  the 
Romanoffs,  after   the   coming  of   Soviet   Russia   and   of   Soviet 

*  From    the    New    Statesman.       13:252-3.      June    14,    1919. 


270  SELECTED   ARTICLES 

Hungary,  who,  whatever  his  attitude  towards  these  things,  will 
dare  to  affirm  that  revolutionary  social  changes  are  impossible 
in  his  own  country?  Who  will  hold  an  untarnished  faith  in  the 
permanence  and  inviolability  of  the  old  order? 

The  fundamental  causes  of  the  world-wide  unrest  are  mainly 
economic.  Some  peculiarly  bad  clause  in  the  Peace  Treaty,  some 
blunder  of  the  politicians,  some  manifestation  of  militarist  re- 
action, may  prove  to  be  the  spark  which  will  set  the  world 
ablaze.  But  the  fundamental  cause  of  the  conflagration  will  lie 
deep  down  m  the  economic  system.  The  workers  of  France  or 
Italy  or  Great  Britain  will  rise  in  revolt  not  really  because  in- 
justice is  being  done  to  the  workers  of  Germany  or  Hungary 
or  Russia,  but  because  in  every  country  it  is  becoming  increas- 
ingly difficult,  as  the  Coal  Commission  has  abundantly  shown, 
for  the  workers  to  live  any  longer  under  an  economic  system 
devoted  primarily  to  the  making  of  profit.  This  is  not  to  say 
that  a  majority,  or  anything  like  a  majority,  is  consciously  de- 
manding the  overthrow  of  the  capitalist  system.  Socialism  of 
any  constructive  sort  remains,  probably  in  every  country,  the 
creed  of  a  minority.  But  even  the  majority  which  has  not 
attempted  to  formulate  a  constructive  opinion  has  changed. 
The  pre-war  industrial  system  rested  upon  the  general  acquies- 
cence of  the  workers  in  the  subordination  of  their  personality 
to  the  needs  of  industry  as  interpreted  by  capitalists  and  em- 
ployers. It  was  possible  only  because  it  was  able  to  treat  La- 
bour as  a  thing  instead  of  a  number  of  persons,  and  because 
Labour,  though  it  kicked  occasionally,  as  a  rule  acquiesced  in 
that  treatment.  To-day,  nearly  everyone  has  a  higher  conceit 
of  himself  than  he  had  before.  Nearly  everyone  makes  not 
only  higher  material  claims,  which  are  hard  enough  for  capital- 
ism to  satisfy,  but  also  higher  human  claims,  which  it  has  no 
means  at  all  of  satistVing,  and  which  most  of  its  protagonists 
do  not  even  attempt  to  understand.  We  are  face  to  face  with 
the  fact  that  the  war  has  taught  the  workers  in  almost  every 
country  to  assert  their  human  claims  by  putting  forth  the  vast 
economic  strength  which  hitherto  they  have  not  known  how  to 
use. 

To-day,  men  are  refusing  any  longer  to  believe  that  they 
were  made  for  industry,  and  are  asserting  vehemently  tliat  in- 
dustry was  made  for  all  men,  and  must  adjust  itself  to,  and 
comply  with,  human  needs.  That  is  the  real  meaning  of  the 
world-wide  unrest,  the  real  moral  of  the  repeated  strikes,  from 
whatever  immediate  causes  they  may  spring. 


PROBLEMS   OF   LABOR  271 

The  question,  then,  for  statesmen  in  all  countries  is  whether 
the  economic  and  social  system  can  transform  itself  so  as  to 
comply  with  the  new  human  standards  of  value  by  which  it  is 
being  judged.  If  it  cannot,  it  will  go  to  pieces,  not  perhaps  this 
year,  but  next  year  or  the  year  after,  or  at  least  within  the  next 
decade.  Many  people  see  that  this  is  true  of  a  large  part  of 
Europe,  and  j'Ct  believe  that  this  country  is  somehow  mysteri- 
ously immune  from  the  coming  epidemic  of  social  and  industrial 
revolution.  There  could  be  no  greater  mistake.  What  is  true 
of  Europe  is  true  of  us;  and  it  is  certain  that  we  must  either 
undertake  the  complete  overhauling  of  our  industrial  system  or 
else  plunge  slowly  after  our  neighbors  into  a  chaos  out  of 
which  a  better  order  may  arise,  but  which  will  certainly  first 
cause  untold  suffering  in  every  class. 

"It  may  be  we  shall  rise  the  last  as   Frenchmen  rose  the  first, 

Our  wrath   come   after   Russia's   wrath,   and   our   wrath   be  the   worst." 

If  we  are  to  escape  such  an  ending  to  our  knight-errantrjr 
on  behalf  of  world  democracy,  we  shall  do  well  to  set  our  house 
in  order.  But  where  and  how  are  we  to  make  a  beginning? 
The  system  of  private  profit  has  us,  like  our  neighbour  na- 
tions, in  its  toils.  Our  Ministers  of  State  are  still  declaring 
that  they  desire  to  see  high  profits,  because  high  profits  are  es- 
sential to  the  rapid  and  successful  development  of  industry. 
Our  emploj^ers  have  still  no  suggestion  for  a  remedy  for  social 
ills  beyond  a  reiteration  of  the  demand  for  increased  produc- 
tion. Yet  surely  it  is  obvious  to  anyone  who  looks  with  half 
an  eye  at  the  industrial  situation  that  the  problem  of  production 
is  only  part  of  a  general  psychological  problem,  and  that  there 
can  be  no  solution  of  it,  and  no  creation  of  industrial  efficiency, 
unless  the  idea  of  production  is  related  to  the  idea  of  service. 
If  we  want  efficiency,  we  must  persuade  the  workers  that  it  is 
worth  while,  and  their  bounden  duty,  to  do  their  best;  but  this 
we  cannot  do  while  we  still  ask  them  to  work  under  a  system 
which,  from  any  moral  standpoint,  is  utterly  indefensible.  The 
only  appeal  which  can  restore  the  world  to  good  order  is  a  moral 
appeal ;  and  such  an  appeal,  under  present  conditions,  we  simply 
have  not  the  right  to  make.  It  is  true  that  our  position  is  in 
this  respect  certainly  no  worse  than  that  of  other  nations;  but 
it  is  a  scant  consolation  if  we  must  all  parish  together  for  our 
sins. 

There  is  no  need  to  take  a  sensational  view  in  order  to  em- 
phasise  the   gravity   of   the   strikes   which   are   now   epidemic   in 


272  SELECTED   ARTICr,ES 

every  industrial  country.  It  is  out  of  economic  movements  that, 
under  present  conditions,  political  movements  arc  almost  bound 
to  proceed ;  and,  even  if  the  present  troubles  blow  over,  we  can 
be  sure  that  others  will  follow  unless  the  root  evils  which  create 
them  are  removed. 


THE  AUSTRALIAN   SYSTEM   OF  DEALING 
WITH    LABOR    DISPUTES' 

The  Australian  system  of  dealing  with  labor  disputes  and  of 
the  regulation  of  labor  conditions  has  passed  through  many 
changes.  Different  states,  each  with  full  power  of  self-govern- 
ment, have  from  time  to  time  altered  and  amended  their  laws 
according  to  experience.  In  New  Zealand,  for  instance,  the 
Industry  Disputes  Act  has  been  amended  in  some  way  on  an 
average  of  once  every  two  years  since  the  year  igoo.  In  New 
South  Wales,  existing  legislation  has  on  three  occasions  been 
practically  repealed,  and  entirely  new  laws  have  been  passed. 
But  in  all  the  states  there  is  a  striking  uniformity  of  essentials. 
The  whole  industrial  system  is  based  on  the  principle  that  the 
relationship  of  employer  and  employe  is  a  matter  of  grave  social 
concern  that  justifies  interference  by  some  centralized  authori- 
ties. In  other  words,  freedom  of  contract  is  not  now  unlimited 
but  can  only  operate  within  certain  areas  prescribed  by  law.  The 
desire  of  parliaments  has  always  been  to  make  this  interference 
between  employer  and  workman  as  small  as  possible,  and  the 
result  has  been  that  practically  all  industries  work  today  only 
above  minima  which  are  from  time  to  time  prescribed,  and  dur- 
ing certain  hours  that  are  fixed  by  law. 

To  understand  the  Australian  system  it  is  necessary  to  real- 
ize that  the  country  generally  has  accepted  three  definite  in- 
dustrial claims  as  now  bej'ond  dispute.  We  start  off  in  the 
new  era  of  reconstruction  with  concessions  finally  guaranteed 
that  are  the  subject  of  controversy  in  other  countries.  These 
three  fundamentals,  as  I  might  call  them,  are  as  follows: 

1.  The  recognition  of  the  fullest  right  of  workmen  to  organise  for 
their  own  protection,  and  the  right  of  each  union  to  make  the  collective 
bargain    for   the   industry   that   it   represents. 

2.  The  recognition  of  the   eight-hour  day. 

3.  The  recognition  of  the  principle  of  the  living  wage  in  all  industries 
— that  is,  the  drawing  of  a  line  below  which  competition  in  the  labor 
market  is  illegal,  but  above  which  ordinary  economic  forces  come  into  play. 

'  By  George  Beeby,  Minister  of  Labor,  New  South  Wales.  Survey. 
42:399-401.     June  7,    1919. 


PROBLEMS    OF    LABOR  273 

These  three  concessions  have  been  the  result  of  our  system  of 
industrial  arbitration.  This  system  has  been  arrived  at  by  two 
different  methods  which  have  gradually  converged.  Two  states 
adopted  what  is  known  as  the  wages  board  sj'stem,  all  the 
others,  what  can  more  accurately  be  described  as  judicial  arbi- 
tration. 

The  wages  board  system  contained  the  minimum  element  of 
compulsion.  Under  it  the  government  of  the  day  had  power, 
within  certain  limits,  to  appoint  a  wages  board  for  an  indus- 
try. This  board  generally  consisted  of  about  six  workmen  and 
six  employers  who  selected  their  own  chairman,  with  provision 
that  the  government  could  provide  a  chairman  in  the  event  of 
failure  of  mutual  selection.  These  boards  were  authorized  to 
declare  a  minimum  standard  for  the  industry  on  hours,  mini- 
mum wages  and  the  conditions  attached  to  juvenile  labor.  They 
originally  applied  only  to  certain  industries  in  which  women  and 
children  were  largely  employed,  such  as  garment  making,  manu- 
facture of  confectionery  and  similar  occupations ;  but  they  wore 
gradually  extended,  and  in  the  states  which  had  adopted  this 
system  all  manufacturing  industries  gradually  came  under  regu- 
lation. The  finding  of  the  board  became  a  common  rule  for  the 
industr}-,  and  any  employer  working  below  the  standard  fixed 
was  liable  to  cash  penalties.  That  sjstem,  however,  did  not  in 
any  way  interfere  with  the  rights  of  the  workmen  to  take  part 
in  a  strike  or  in  any  other  legal  way  to  force  a  better  bargain 
for  his  trade. 

One  of  these  states  which  originally  adopted  wages  boards 
abandoned  the  scheme  and  now  works  under  the  system  of 
judicial  arbitration.  The  wages  board  system  today  operates 
only  in  one  state,  Victoria,  and  its  awards  generally  conform 
to  the  standards  fixed  by  the  arbitration  courts.  The  judicial 
system  was  adopted  originally  in  Xew  Zealand  and  ultimately, 
with  variations,  by  the  states  of  New  South  W'ales,  South 
Australia,  Queensland  and  Western  Australia.  It  leads  to  the 
ultimate  settlement  of  all  industrial  disputes  by  a  court  especially 
appointed,  generally  consisting  of  a  single  judge.  In  some  cases 
the  judge  sits  with  assessors  representing  the  two  interests,  but 
in  nine  cases  out  of  ten  the  ultimate  decision  rests  with  the 
judge.  These  judges  operating  in  these  states  and  in  the  federal 
area  conduct  proceedings  much  on  the  same  lines  as  those  of  a 
civil  court.  The  parties  become  litigants,  they  file  claims  and 
replies,  issues  are  joined,  advocates  are  eneraged,  and  elaborate 


274  SELECTED   ARTICLES 

inquiries  in  open  court  arc  held,  evidence  being  called  in  sup- 
port of  cases,  in  the  reply,  in  rejoinder,  in  rebuttal ;  and  in  every 
way  the  paraphernalia  of  a  court  is  maintained.  Ultimately  the 
decision  is  left  to  the  judge  whose  award,  when  made,  becomes 
the  standard  for  the  industry. 

Today  there  is  a  strong  movement  for  a  complete  change 
of  this  system.  It  is  frankly  admitted  by  both  sides  that  its 
effect  has  been  to  keep  workmen  and  employers  apart,  that  a 
vast  amount  of  work  done  by  the  courts  could  be  done  by 
voluntary  conciliation  and  equally  satisfactory  results  reached. 
The  movement  in  Australia  today  is  towards  investigation  of 
industrial  troubles  by  negotiation  rather  than  by  litigation. 

New  Zealand  has  already  altered  its  law  and  makes  it  difificuU 
for  the  arbitration  court  to  deal  with  the  case.  Before  it  can 
get  to  the  court  it  must  be  dealt  with  by  a  special  body  appointed 
for  a  district  or  appointed  for  each  individual  dispute.  In  every 
way  the  parties  are  urged  and  encouraged  to  arrive  at  their 
own  agreements,  but  in  the  background  the  court  exists  to  deal 
with  the  cases  of  violent  controversy,  particularly  in  industries 
of  a  national  character. 

In  New  South  Wales  a  recent  law  provides  for  the  appoint- 
ment of  a  board  of  trade.  This  board  of  trade  consisting  of 
representatives  of  emploj^ers  and  workmen  in  equal  numbers, 
with  a  judge  of  the  industrial  court  acting  as  president,  is  en- 
trusted with  the  following,  among  its  other  duties: 

1.  The  fixing  from  year  to  year  of  the  basic  living  wage  applicable 
to  all  adult  male  and  female  labor.  (This  function  does  not  in  any  way 
prevent  arbitration  courts  from  fixing  minima  for  particular  industries.  It 
only  restricts  them  from  going  below  the  basic  living  wage.) 

2.  The   appointment    of   industrial   councils   for   industries. 

3.  The    appointment    of   shop    committees    for    individual    workshops. 

4.  The  general  encouragement  of  a  system  of  industrial  organization 
on  the  lines  of  the  Whitley  scheme. 

5.  The  holding  of  inquiries  on  important  industrial  matters  of  uni- 
versal interest  and  the  recommendation  to  Parliament  from  time  to  time 
of  legislation. 

6.  The  absolute  control  of  the  conditions  under  which  juvenile  l.ibor 
can   be  employed. 

The  idea  of  this  act  is  gradually  to  transfer  the  whole  system 
of  industrial  regulation  from  judges  and  industrial  courts  to 
these  industrial  councils  and  shop  committees. 

Power  is  also  given  to  the  government  to  utilize  the  indus- 
trial councils  in  any  future  provision  which  may  be  made  for 
unemployment  insurance.  There  is  strong  opposition  to  main- 
tenance of  any  highly  centralized  fund  dealing  with  insurance 
against  employment  and  equalization  of  wage  pay.    It  is  thought 


PROBLEMS    OF   LABOR  275 

that  the  great  problem  will  be  more  effectively  dealt  with  if 
power  is  given  to  the  government  to  subsidize  any  fund  which 
may  be  raised  in  any  industrial  council  for  the  purpose  of  unem- 
ployment insurance. 

It  must  be  remembered  that  a  real  effort  is  being  made 
throughout  the  commonwealth  today  to  move  by  stages  from 
the  old  system  of  industrial  arbitration  to  a  system  based  some- 
what on  the  Whitley  scheme.  The  legislation  is  so  framed  as 
to  give  the  minister  of  the  day  ample  power  to  encourage  in 
ever}'  way  this  program  of  bringing  employers  and  workmen 
into  close  touch ;  but  the  idea  of  maintaining  some  tribunal 
which  in  the  end  can  fix  minimum  standards  for  an  industry  in 
the  event  of  the  failure  of  negotiation,  is  maintained.  With 
all  its  faults,  the  general  opinion  among  employers  is  that  in 
these  days  of  perpetual  industrial  unrest  it  is  essential  to  have 
some  tribunal  before  which  parties  in  violent  dispute  can  be 
called,  and  to  force  them  to  adjust  their  differences.  Work- 
men today  are  not  favorable  to  compulsory  arbitration.  They 
believe  that  the}^  could  have  achieved  bigger  results  by  the  free 
use  of  the  strike  weapon  and  clajm  that  restrictions  on  the  right 
to  strike  have  held  them  back/  There  is  some  basis  for  this 
objection  from  their  point  of  view.  Arbitration  has  largely  im- 
proved the  standards  of  unskilled  labor  and  of  those  classes  of 
workmen  who  in  the  past  have  found  it  difficult  to  organize. 
The  lower  grades  of  labor  clearly  have  received  very  definite 
benefits  from  the  system,  but  the  skilled  mechanic,  with  the 
perpetual  restriction  placed  on  his  right  to  strike,  has  not  im- 
proved his  standards  in  the  same  proportion.  That  is  to  say, 
the  relative  difference  between  skilled  and  unskilled  labor  is  not 
as  great  today  as  it  was  before  the  systems  were  adopted. 

These  limitations  on  the  power  to  strike  have  not  in  any 
way  saved  us  from  serious  dislocations.  Workmen  strike  freely 
in  Australia,  in  spite  of  the  law,  and  no  law  can  check  them. 
But  constant  public  investigation  of  industrial  disputes  has  had 
a  very  restrictive  effect.  It  has  prevented  and  has  shortened 
many  strikes.  All  proceedings  in  the  past  have  been  in  open 
court,  and  the  public  has  become  rather  intimately  acquainted 
with  the  nature  of  industrial  relations.  Workmen,  except  those 
who  are  revolutionary  in  tendency,  are  often  engaged  in  analyz- 
ing the  important  question  whether  an  industry  can  stand  some 
increase  which  is  proposed  and.  generally,  the  whole  system  has 
been  of  great  educational  value.     Its  main  weakness,  however. 


2/6  SELECTED   ARTICLES 

lias  been  that  it  lias  prevented  negotiation  and  has  kept  employ- 
ers and  workmen  in  two  definite,  hostile  camps,  always  ready  to 
litigate  but  rarely  in  the  mood  for  conciliation. 

It  must  be  remembered  that  the  national  parliament,  Con- 
gress as  you  call  it,  has  some  power  over  industrial  matters. 
The  federal  constitution  provides  that  parliament  can  legislate 
for  the  prevention  and  settlement  of  industrial  disputes  extend- 
ing beyond  the  limits  of  any  one  state.  In  pursuance  of  this 
power,  the  federal  court  of  arbitration  has  been  set  up,  and 
any  dispute  which  gets  beyond  the  boundary  of  one  state  can 
be,  and  often  is,  determined  by  this  federal  court.  The  court, 
however,  is  constituted  very  much  on  the  same  lines  as  those 
of  difFercnt  states  and  generally  adopts  the  same  principles  in 
many  awards.  The  tendency  is  for  unions,  if  possible,  to  make 
their  disputes  go  beyond  the  state  boundary.  They  prefer  the 
federal  tribunal  to  that  of  the  states.  But  in  this  court  the 
learned  judge  who  is  today  its  president  has  not  gone  to  any 
material  extent  above  the  standards  generally  recognized  by 
these  state  tribunals.  He  has  laid  down  one  general  guiding 
principle,  and  the  duty  of  his  court  is  not  to  regulate  the  de- 
tailed workings  of  an  industry  but  merely  to  provide  for  the 
fixing  of  a  reasonable  standard  of  living  in  the  industrj',  leaving 
the  complete  management  of  the  business  in  the  hands  of  the 
employer  and  his  representatives. 

There  has  been  much  comment  by  employers  from  time  to 
time  on  different  awards.  There  has  been  considerable  oppo- 
sition to  the  whole  system,  but  this  has  gradually  disappeared. 
Very  few  employers  today  ask  for  a  complete  repeal  of  our 
industrial  legislation.  They  welcome  public  investigation  of 
claims  made,  and  they  agree  that  in  a  young  country  which  is 
building  up  its  manufacturing  industries  it  is  better  that  all  em- 
ployers should  be  put  upon  the  same  footing.  No  employer 
in  Australia  can  now  obtain  an  advantage  by  the  use  of  cheap 
labor.  It  is  true  also,  as  the  employers  state,  that  the  fixing  of 
the  minimum  wage  for  the  industry  has  tended  to  inefficiency, 
but  employers  are  not  without  blame  in  this,  when  wages  fixed 
have  been  only  minima.  Most  employers  at  the  outset,  directly 
a  wage  was  fixed,  petulantly  announced  that  all  their  employes 
in  the  future  would  get  the  same  wage  and  abolished  the  varia- 
tions which  previously  existed.  The  result  of  this  general  appli- 
cation of  the  minimum  as  a  standard  wage  undoubtedly  led  ex- 
pert workmen  to  come  down   to   somewhere  near  the  level  of 


PROBLEMS    OF   LABOR  277 

the  average  man.  During  recent  years,  however,  many  employ- 
ers have  accepted  the  awards  of  the  court  only  as  minima  and 
have  higher  wages  in  order  to  get  higher  results. 

There  is  also  a  ver}-  strong  movement  today  to  try  to  intro- 
duce systems  of  payment  on  piece-work  and  payment  by  re- 
sults, but  this  is  bitterly  resisted  by  unionism.  It  is  thought 
that  the  industrial  councils  will  probably  be  able  to  bring  about 
some  change  in  this  direction.  In  the  shipbuilding  industry, 
recently  commenced,  the  New  South  Wales  government  has 
succeeded  in  getting  mechanics,  particularly  those  engaged  in 
riveting,  to  work  on  a  piece-w'ork  basis,  with  proper  guarantees 
that  increased  output  will  not  lead  to  reduction  of  piece-work 
rates,  and  also  with  the  provision  that  workmen  shall  not  injure 
themselves  by  going  beyond  the  ordinary  eight-hour  day's  work, 
except  in  cases  of  emergency.  The  result  of  this  change  was 
that  the  output  of  riveters  per  man  was  on  an  average  doubled 
within  a  few  weeks,  and  it  is  anticipated  that  even  better  results 
can  be  obtained  without  injury  to  the  workmen. 

I  discussed  the  whole  of  this  question  with  the  associated 
chambers  of  manufacturers  of  Australia  some  weeks  ago,  and 
the  gathering  unanimously  agreed  to  the  following  propositions: 

1.  That  a  minimum  standard  of  comfort  prescribed  by  law  was  not 
injurious  to  them,  so  long  as  the  detailed  management  of  the  business 
was  left  entirely  to  their  own  judgment. 

2.  That  the  eight-hour  law,  particularly  in  all  industries  in  which 
men  worked  under  cover,  or  in  connection  with  machinery,  should  be  uni- 
versally established. 

3.  That  the  time  had  arrived  for  a  joint  responsibility  of  the  grovern- 
ment,  the  employer,  and  the  workman,  to  provide  ettective  means  of  in- 
surance  against   unemployment,    sickness   and   accident. 

4.  That  as  a  last  resort  it  was  best,  in  the  interests  of  the  state,  to 
maintain  some  authoritative  system  of  settlement  of  industrial  disputes  in 
all  important  industries. 

5.  That  standardized  conditions  for  the  whole  commonwealth,  as  to 
the  conditions  of  employment   of  juvenile  labor,   were   advisable. 

I  venture  to  summarize  the  situation  as  follows :  Australia 
will  continue  to  maintain  the  three  fundamentals  mentioned  in 
the  beginning  of  this  statement. 

It  w'ill  continue  to  maintain  some  tribunals  which  will  have 
power  as  a  court  of  ultimate  resort  to  make  an  award  in  settle- 
ment of  industrial  disputes  which  will  be  binding  on  the  parties. 
But  these  tribunals  will  probably  consist  more  of  industrial 
councils,  and  access  to  them  will  be  more  difficult.  There  will 
also  be  created  industrial  councils  for  industries  and  shop  com- 
mittees for  individual  establishments.  And  all  parties  will  be 
compelled  to  negotiate  in  these  councils  on  all  matters  affecting 
industries  before  they  will  get  access  to  a  compulsory  tribunal. 


2/8  SELECTED   ARTICLES 

A  definite  movement  will  before  long  be  made  in  the  direc- 
tion of  unemployment  insurance,  but  will,  I  think,  be  on  the 
lines  already  indicated ;  that  is,  the  industrial  council  will  be- 
come responsible  for  the  creation  and  maintenance  of  the  fund 
for  its  particular  industry — this  fund  being  liberally  subsidized 
from  the  public  purse.  Industrial  records  of  individual  work- 
men will  be  kept,  and  gradually  those  who  are  imworthy  will  be 
scheduled  and  not  allowed  to  participate  in  any  insurance  fund. 

The  general  control  of  the  whole  scheme  of  industrial  regu- 
lation will,  I  think,  beyond  doubt  before  very  long  be  centralized 
in  the  national  government.  There  is  a  strong  movement  today 
which  is  rapidly  reaching  a  climax  to  vest  this  important  func- 
tion in  a  national  authority  on  the  understanding  that  it  uses 
the  state  machinery  now  in  existence.  Some  uniformity  is  es- 
sential. There  is  considerable  conflict  today  between  different 
state  systems  and  the  federal  system,  and  both  employers  and 
workmen  are  in  agreement  that  it  would  be  better  to  take  the 
industrial  power  from  the  hands  of  state  parliaments  and  invest 
it  in  Congress. 


THE    DEVELOPMENT    OF    GO\'ERNl\IENT     TX 
INDUSTRY ' 

During  the  past  five  j-ears,  in  several  branches  of  the  gar- 
ment-making industries  of  New  York  and  Chicago,  certain  prin- 
ciples for  the  adjustment  of  conflicting  interests  with  employees 
by  legal  methods  have  been  experimented  with.  This  experience 
has  suggested  certain  ideas  and  possibilities  interesting  to  those 
who  appreciate  the  growing  danger  of  leaving  the  settlement 
of  employer-employee  controversies  to  the  arbitrament  of  in- 
dustrial warfare  and  who  understand  how,  in  other  human  re- 
lations, the  crude  method  of  force  has  been  superseded  by  the 
legal  method. 

The  protocol^  in  the  cloak  and  suit  trade,  together  with  half 
a  dozen  similar  protocols  in  other  liranches  of  garment-making 
in  New  York,  the  Rockefeller  system  of  industrial   representa- 

1  By  Earl  Dean  Howard^  Director  of  Labor  for  Hart,  Schaffner  & 
Marx,  Professor  of  Economi'cs  in  the  College  of  Liberal  Arts  and  Pro- 
fessor of  Banking  and  Finance  in  the  School  of  Commerce,  Northwestern 
University.      From    the   Illinois   Law   Review   for   March,    19 16. 

^.  See  Bulletin  of  U.  S.  Bureau  of  Labor  Statistics  No.  144,  March 
1914,  entitled,  "Industrial  Court  of  the  Cloak,  Suit  and  Skirt  Industry  of 
New   York   City,"  by  Charles   H.   Winslow. 


PROBLEMS   OF   LABOR  279 

tion  in  the  Colorado  mines,  and  the  labor  agreement  of  Hart 
Schaffner  &  Marx^  in  Chicago,  grew  out  of  long  and  bitter 
strikes,  severe  enough  on  both  sides  to  convince  the  parties 
thereto  that  the  old  system  was  intolerable.  Complete  domina- 
tion by  either  side  was  impossible  and  intermittent  struggles 
over  the  division  of  power  were  costly  and  unsatisfactory.  The 
protocols  and  agreements  provided  a  system  of  government  to 
protect  each  side  against  the  other. 

Any  system  of  government  for  the  adjustment  of  human  re- 
lations and  conflicting  interests  by  law  rather  than  by  force  re- 
quires some  devices  to  perform  legislative,  executive  and  ju- 
dicial functions.  Rules  must  be  laid  down  and  interpreted,  ad- 
ministrative duties  must  be  discharged,  effective  limitations  and 
requirements  must  be  placed  upon  individuals  to  secure  co- 
ordination, and  all  questions  in  dispute  must  be  authoritatively 
decided. 

There  is  a  strong  tendency  to  enlarge  the  scope  of  political 
government  so  as  to  include  also  industrial  government. 
Whether  this  shall  grow  into  state  socialism  or  whether  private 
enterprises  will  be  able  individually  or  collectively  to  establish 
a  satisfactory  form  of  government,  supplementary  to  political 
government,  is  one  of  these  large  interesting  questions  which 
inay  be  decided  within  a  generation  or  two.  The  solution  may 
depend  upon  the  ability  of  the  employees  to  develop  a  construc- 
tive power  and  effective  government  among  themselves. 

Employers  and  those  responsible  for  the  prosperity  of  large 
enterprises  are  reluctant  to  lose  any  part  of  their  control.  When 
they  discover  that  the  power  has  passed  from  them,  or  when 
their  government  has  failed  to  maintain  place,  they  are  then 
ready  for  experiment.  The  protocols  and  other  experiments 
have  always  grown  out  of  strikes,  usually  long  and  exhausting. 

Structure  of  Government. — The  first  step  is  an  agreement  on 
constitution  providing  usually  for  a  board  of  arbitration. 
Executive  control  is  left  in  the  hands  of  the  employer  but  sub- 
ject to  the  limitations  of  the  agreement  and  the  decrees  of  the 
board.  The  representatives  of  the  employees,  usually  labor  union 
officials,  strive  through  the  board  to  extend  these  limitations  to 
inhibit  all  acts  of  the  employer  which  the  emploj'ees  or  their 
officials  conceive  to  be  of  any  disadvantage  to  themselves.  The 
system  resembles  a  constitutional  monarchy. 

3  See  Monthly  Bulletin  of  the  Pennsylvania  Department  of  Labor  and 
Industry,  August  1915.  "The  Experience  of  Hart,  Schaffner  &  Marx  with 
Collective  Bargaining." 


28o  SliLLCTED   ARTICLES 

The  legislative  function  is  usually  inadequately  provided  for. 
Xcw  conditions  arise  to  which  the  rules  of  the  agreement  and 
previous  decisions  are  not  applicable.  The  employer  claims  the 
right  to  legislate  by  administrative  decree  on  the  ground  that 
he  has  all  the  authority  not  specifically  relinquished  in  the  agree- 
ment. The  union  officials  urge  the  board  to  assume  jurisdiction 
and  by  a  decision  create  a  precedent  which  has  the  effect  of  l.iw. 
In  practice  legislation  originates  in  several  ways:  (i)  The  con- 
stitution or  basic  agreement  entered  into  by  the  parties  at  inter- 
vals for  definite  terms  and  with  which  the  decisions  of  the  board 
of  arbitration  must  iiarmonize;  (2)  administrative  orders 
promulgated  by  the  employer  and  subject  to  veto  or  alteration 
by  the  board  of  arbitration  on  the  ground  of  unconstitutionality; 
(3)  judicial  decisions  having  the  force  of  precedents  by  the 
•oard  of  arbitration  in  adjudicating  complaints — "judge-made" 
law. 

The  judicial  function  is  performed  by  the  board  of  arbitra- 
tion and  inferior  courts  or  committees,  such  as  the  Trade  Board 
in  the  Hart  Schaffncr  &  Marx  system,  and  the  Committee  on 
Immediate  Action  in  the  Suit  and  Cloak  Protocol.  Appeals  may 
always  be  taken  for  final  decision  to  the  board  i^f  arbitration. 
Decisions  are  based  upon  the  fundamental  agreement,  adminis- 
trative orders  which  have  not  been  challenged,  precedent  de- 
cisions, customs  and  practices  in  the  industry. 

The  judicial  boards  and  committees  are  composed  of  repre- 
sentatives in  equal  strength  of  employers  and  employees,  pre- 
sided over  by  a  neutral  arbitrator  who  casts  the  decisive  vote. 
This  neutral  arbitrator  has  the  opportunity  to  develop  an  extra- 
li^gal  process  of  mediation  by  vsliich  the  necessity  of  much  liti- 
gation is  avoided.  It  is  usually  stipulated  that  agreements 
reached  by  mediation  do  not  create  precedents,  but  apply  only 
to  particular  cases  in  hand.  The  neutral  arbitrator,  if  he  have 
the  ability  and  inclination,  may  in  the  course  of  his  work  by 
discussion  and  education  establish  standards  of  justice  and  fair 
dealing  in  the  employer-employee  relation  acceptable  to  both 
sides.  These  may  form  a  sort  of  unwritten  constitution  of  great 
practical  influence  upon  the  harmonious  operation  of  the  enter- 
prise. The  possibility  of  disputes  and  conflicts  is  greatly  re- 
duced when  the  parties,  acting  in  good  faith,  gradually  ap- 
proach agreement  in  their  beliefs  as  to  what  is  right  and  wrong 
action. 


PROBLEMS    OF    LABOR  281 

Lidustrial  concerns  which  have  adopted  some  form  of  indus- 
trial government  such  as  here  described  find  it  advantageous  to 
cstaljlish  a  department  to  supervise  their  relations  with  their 
employees  and  to  represent  them  in  litigation  and  negotiation. 
Positions  are  thus  created  for  men  who  have  been  trained  in 
economics,  political  science,  law  and  business,  and  who  have 
talent  for  negotiating,  pleading,  instructing  and  social  service 
work. 

In  tlie  five-year  experience  with  the  Hart  Schaffner  &  Marx 
arrangement,  most  of  the  fundamental  issues  which  arise  in  the 
employer-employee  relation  have  been  met  and  adjudicated. 
These  typical  cases  have  revealed  principles  which  may  some 
day  help  to  form  an  established  code  of  governing  rules  for  in- 
dustry and  supplanting  the  present  method  of  competitive  bar- 
gaining and  conflicts  settled  by  economic  strength. 

OpportiDiity  to  Work. — The  ordinary  concept  of  the  em- 
ployer is  that  labor  is  a  com.modity  purchasable  as  other  commod- 
ities. He  strives  to  get  as  much  as  he  can  as  cheaply  as  pos- 
f.ible.  The  job  or  opportunity  to  work  is  his  private  property 
and  the  workman  has  no  claim  upon  it.  The  new  principle  gives 
the  worker  a  right  to  his  job  which  can  be  defeated  only  by  his 
own  misconduct.  The  job  is  the  source  of  livelihood  to  the 
worker  exactly  as  his  capital  is  the  source  of  livelihood  to  the 
capitalist.  In  the  slack  season  whatever  work  there  is  shall  be 
divided  equally  among  all  as  far  as  practicable. 

In  case  of  discharge,  the  burden  of  proof  is  upon  the  em- 
ployer to  show^  that  such  discharge  is  necessary  for  the  welfare 
of  the  organization.  He  must  also  show  that  any  alternative 
action  involving  less  hardship  on  the  individual  is  inadequate. 

So  long  as  there  is  an  adequate  supply  of  labor  available  in 
the  skilled  trades,  the  employer  must  not  introduce  an  unreason- 
able number  of  apprentices  into  the  trade. 

In  the  hiring  of  new  help,  preference  must  be  given  to  mem- 
l)ers  of  the  union  which  is  a  party  to  the  agreement,  provided 
such  members  are  competent  and  of  good  records.  To  main- 
tain its  prestige  with  the  people,  the  union  must  be  able  to  keep 
all  its  reputable  members  at  work. 

Discipline. — Disciplinary  penalties  must  never  be  allowed  as 
a  means  of  discouraging  the  organization  of  employes  into 
unions.  The  employees  must  have  leaders,  and  some  of  these, 
lacking   experience    and   information,    sometimes   fail    to    distin- 


282  SELECTED   ARTICLES 

guish  between  legitimate  complaining  and  insubordination.'* 
Discrimination  on  account  of  union  activity  is  difficult  to  prove 
or  disprove  and  is  a  favorite  device  for  befogging  a  case.  The 
difficulty  is  diminished  by  specializing  the  disciplinary  function 
in  one  man  who  is  free  from  suspicion  of  antagonism  to  the 
organization  of  employees. 

Managers  who  are  directly  responsible  for  the  efficiency  of 
the  shop  should  not  be  burdened  with  the  responsibilities  of 
discipline.  This  function  is  one  of  great  delicacy.  If  badly  or 
unskilllully  performed  it  is  a  fruitful  source  of  antagonisms 
and  personal  feelings  which  is  like  sand  in  a  complicated  ma- 
chine. If,  however,  it  is  handled  with  judgment  and  resource- 
fulness by  an  official  who  is  detached  from  an  immediate  interest 
in  the  operations  and  who  can  look  forward  to  ultimate  results, 
the  function  presents  great  opportunities  for  gaining  the  respect 
and  good  will  of  the  employees.  Discipline  cases  afford  the 
finest  opportunities  for  educational  work,  both  with  worker  and 
foreman. 

So  long  as  the  offending  employee  is  to  be  retained  in  the 
factory,  any  disciplinary  penalty  must  be  corrective  and  no  more 
severe  than  is  necessary  to  accomplish  the  best  results  for  all 
concerned.  Most  offenders  are  victims  of  wrong  ideals  or 
mental  deficiencies,  the  remedy  for  which  is  not  punishment  but 
help  and  instruction.  Delinquencies  in  management  can  fre- 
quently be  discovered  and  the  manager  or  other  executive  may 
need  the  services  of  the  expert  discipline  officer  quite  as  much 
as  the  original  offender.  The  efficiency  of  the  discipline  officer 
should  be  measured  by  the  proportion  of  ex-oft'enders  who  have 
ultimately  become  competent  and  loyal  friends  of  the  company. 
It  is  his  prime  duty  to  prevent  and  remove  from  the  minds  of 
the  people  all  sense  of  injustice  in  their  relations  with  the  em- 
ployer, which  is  the  fundamental  cause  of  the  bitterest  indus- 
trial conflicts. 

Management. — The  great  defect  in  autocratic  government  is 
the  lack  of  adequate  and  intelligent  criticism.  Autocratically- 
governed  business  enterprises  suffer  from  the  absence  of  their 
wholesome  check.  Organized  employees  represented  by  spokes- 
men who  are  protected  in  that  function,  together  with  a  labor 

■*  Under  the  protocol,  piece-work  prices  are  determined  by  bargaining 
between  the  individual  employee  and  a  shop-committee.  A  serious  situation 
is  created  by  the  suspicion  of  the  workers  that  the  power  of  discipline  is 
used  to  gain  advantage  in  bargaining.  There  is  no  centralization  and 
specialization  of  the  discipline  function  there. 


PROBLEMS    OF   LABOR  283 

department  responsible  for  the  good-will  and  welfare  of  the 
employees,  constitute  a  critical  check  on  bad  management  and 
the  source  of  valuable  suggestion  for  more  efficient  manage- 
ment. Piece-workers,  especially,  are  vitally  affected  in  their 
earnings  by  the  quality  and  efficiency  of  the  management. 
Subordinate  executives  in  the  factory  may  conceal  this  ineffi- 
ciency from  their  superior  officers  for  a  long  time,  but  a  system 
of  free  complaints  makes  this  impossible. 

Standards. — Lack  of  standards  is  probably  the  chief  cause  of 
disorder  and  confficts,  especially  in  the  needle  industries.  This 
includes  standards  of  workmanship,  piece-work  prices,  conduct 
in  the  shop,  and  all  points  which  involve  the  interest  of  the 
employee. 

The  primary  tribunals  or  Trade  Board  should  settle  finally 
all  disputes  as  to  facts;  appeals  should  be  taken  only  when  dis- 
puted standards  are  involved.  Each  case  before  the  Board  of 
Arbitration  is  an  opportunity  to  establish  one  or  more  stand- 
ards. Thus,  unless  the  industry  is  one  of  great  changes,  the 
board  will  find  the  need  for  its  services  grow  gradually  less  as 
both  parties  learn  to  be  governed  by  standards.  The  immense 
value  to  an  industry  of  established  standards  should  reconcile 
the  parties  to  the  time  consumed  in  deciding  some  comparatively 
unimportant  case  which  happens  to  afford  opportunity  for  cre- 
ating a  standard.  The  board  in  such  cases  should  get  expert 
and  technical  testimony  from  all  sources  through  witnesses  and 
committees  of  investigation,  so  that  the  work  is  done  once  for 
all. 

Unionism. — This  system  of  government  assumes  adequate 
representation  of  the  employee ;  such  representation  requires 
organization  and  leadership.  There  are  many  advantages  where 
the  employer  is  large  enough  to  be  independent  of  associations 
of  emploj-ers,  and  where  the  emploj'ees'  organization  is  limited 
to  employees  of  the  one  company.  At  the  outset,  the  working- 
men  are  likely  to  belong  to  national  unions,  and  the  company 
to  be  a  member  of  a  trade  association,  especially  if  the  experi- 
ment begins  at  the  close  of  an  industrial  conflict  or  general 
strike. 

Many  of  the  traditional  principles  and  practices  of  unionism 
are  developed  out  of  a  state  of  militancy  and  are  not  adapted 
to  a  state  of  peaceful  government,  hence  they  are  obstructive. 
Unless  the  employees  as  well  as  the  employer  agree  that  the 
rules  and  decrees  of  the  Board  of  Arbitration  shall  prevail  over 


284  SKLKCTED   ARTICLES 

any  rules  or  orders  of  either  a  national  union  or  a  trade  asso- 
ciation ;  that  the  government  which  they  are  establishing  shall 
receive  their  undi\idcd,  unhyphenated  allegiance ;  the  scheme 
will  be  unsound. 

I'hese  difficulties  do  not  exist  when  the  Board  of  Arbitration 
has  jurisdiction  coextensive  with  the  association  and  union  and 
where  the  entire  membership  of  both  groups  submit  themselves 
to  its  government.  The  combination  of  local  unions  into  great 
national  and  international  federations  was  a  war  measure  and 
loses  its  raisoii  d'etre  when  a  system  of  representative  govern- 
ment is  established. 

\\  hen  the  organization  of  employees  uses  its  strength  to  pro- 
mote the  reign  of  law  and  order,  the  employer  has  an  interest 
in  helping  to  develop  its  strength.  So  long  as  he  has  faith  in 
this  system,  he  cannot  then  be  hostile  to  the  organization. 

The  "'closed  shop"  issue  which  is  responsible  for  .so  much 
industrial  warfare  has  been  eliminated  in  some  of  the  needle 
industries  b\'  the  device  of  the  "preferential  shop."  The  issue 
has  its  cause  in  the  ditficulty  of  the  unions  in  maintaining  their 
membership  and  collecting  money  from  members.  The  unions 
use  tiieir  power  over  the  employer  to  force  him  to  maintain  the 
.strength  of  their  organization  by  penalizing  persons  who  are 
disinclined  to  submit  to  the  rule  of  the  union  officials.  The  con- 
scientious employer  has  moral  scruples  against  forcing  his  em- 
ployees to  be  members  of  a  union  against  their  will  and  to  sub- 
mit to  the  authority  of  union  officials. 

The  preferential  shop  idea  is  a  compromise  by  which  the 
greatest  dangers  and  injustices  of  compulsory  union  member- 
ship are  avoided  and  yet  by  which  there  is  a  distinct  advantage 
to  members  of  the  union  Union  members  have  preference 
when  new  people  are  needed  and,  when  the  force  nuist  be  re- 
duced, they  are  retained  in  preference  to  others. 

Under  this  system  the  danger  of  the  abuse  of  arbitrary 
powers  by  union  officials  as  well  as  by  employers  is  much  re- 
duced. Both  must  submit  in  equal  degree  to  the  board  of  arbi- 
tration, and  all  their  actions  may  be  reviewed  by  that  body.  The 
principles  of  right  action  as  laid  down  by  the  board  governs 
them  equally. 

Wages. — We  are  so  habituated  to  the  idea  of  labor  as  a  pur- 
chased commodity  or  service,  that  it  seems  to  us  quite  natural 
for  the  price  of  it  to  be  determined  by  the  law  of  supply  and 
demand  through  the  bargaining  process.  When  employees  are 
unorganized,  they  are  unable  to  bargain  with  a  large  employer 


PROBLEMS    OF   LABOR  285 

on  anylhing  like  equal  terms ;  when  they  are  organized,  the 
bargaining  may  take  the  form  of  industrial  warfare.  Bargain- 
ing cannot  be  equitable  and  fair  unless  either  party  has  the 
right  to  withhold  what  is  offering  to  the  other.  This  pi-inciple 
is  so  true  that  the  courts  and  legislatures  have  been  forced  to 
legalize  strikes  and  picketing,  notwithstanding  the  tendency  of 
these  measures  to  subvert  law  and  order  and  to  jeopardize  the 
right  of  person  and  property. 

The  dilemma  is  most  acute  in  public  utilities  where  the 
public  interest  is  peculiarly  affected ;  therefore,  every  possible 
means  is  being  tried  to  introduce  government  in  the  form  of 
voluntary  arbitration.  Upon  the  success  of  this  method  may 
depend  the  future  necessity  of  using  the  authority  of  the  state 
to  establish  and  enforce  standards  by  compulsion  in  at  least 
some  instances. 

Whether  voluntary  government  can  succeed  or  not  will  turn 
largely  upon  the  possibilit}^  of  discovering  principles  of  manifest 
justice  from  which  practicable  standards  may  be  deduced.  The 
great  need  is  therefore  a  principle  applicable  to  w^age  controver- 
sies. Much  depends  upon  a  satisfactory  answer  to  the  sphinx- 
riddle,  w^hat  is  a  just  wage? 

In  the  system  here  described,  the  rate  of  wages  and  piece- 
work prices  existing  at  the  beginning  of  the  agreement  was  ac- 
cepted as  the  basis.  Certain  horizontal  advances  were  granted 
to  prevail  during  the  term  of  the  agreement.  At  the  end  of 
that  period,  the  whole  question  is  reopened.  If  both  parties 
agree  to  arbitrate  this  major  question  as  they  do  all  others, 
tiie  burden  is  thrown  upon  the  Board  of  Arbitration  of  finding 
some  governing  principle  from  which  a  rational  decision  may  be 
derived. 

The  student  of  political  science  will  find  in  the  development 
of  voluntar>-  industrial  government  an  interesting  contribution 
to  his  science.  Just  as  the  common  law  of  England  evolved 
from  self-imposed  customs  and  regulations  in  the  "interest  of 
harmonious  dealing  and  relations,  so  here  we  may  observe  an 
organic  growth  of  industrial  government,  establishing  itself 
alongside  the  federal  and  state  jurisdictions.  Perhaps  this  will 
be  the  means  of  escape  from  the  dilemma  of  domination  by  a 
ruling  over  a  subject  class  on  the  one  hand,  and,  on  the  other, 
a  chronic  state  of  civil  warfare  with  the  classes  perpetually 
struggling  for  advantage,  with  small  consideration  for  the  pub- 
lic welfare. 


286  SELECTED   ARTICLES 

THE    QUESTION    OF    TRADE    JURISDICTION* 

Those  who  oppose  trade-unionism  and  advocate  some  other 
form  of  organization  delight  in  calling  attention  to  the  jurisdic- 
tional disputes  which  exist  within  the  trade-union  movement. 
One  of  the  arguments  advanced  in  favor  of  the  industrial  form 
of  organization  is  that  it  would  eliminate  jurisdictional  disputes 
and  therefore  place  the  workers  in  a  much  stronger  position. 

Our  opponents — those  who  advocate  an  industrial  form  of 
organization,  or  "One  Big  Union,"  delight  in  making  the  state- 
ment that  trade-unionism  has  shown  itself  incompetent  because 
the  American  Federation  of  Labor  has  failed  to  adjust  all  in- 
dustrial disputes  when  ihcy  arise. 

What  are  some  of  the  facts  in  the  case? 

Unquestionably  jurisdictional  disputes  have  created  divisions 
of  opinion  between  trade-unionists  when  they  should  have  acted 
collectively.  But  jurisdictional  disputes  arise  principally  because 
of  changes  continually  taking  place  in  industry. 

How  Disputes  Originate 

A  few  years  ago  no  one  could  imagine  a  question  of  juris- 
diction arising  between  the  locomotive  engineers  and  the  street 
car  drivers,  but  electricity  took  the  horse's  place,  the  driver  be- 
came a  motorman,  and  from  street  car  lines  the  interurban 
lines  developed,  some  of  these  interurban  lines  attaching  two  or 
three  passenger  cars  to  the  one  containing  the  motor.  In  some 
cases  locomotive  engineers  operated  these  suburban  trains,  in 
others  members  of  the  Street  Car  Men's  Union  did  likewise, 
and  so,  as  a  result  of  a  rapid  change  in  method  of  transporta- 
tion, a  question  arose  which  has  not  yet  been  finally  settled,  but 
which  is  gradually  reaching  the  point  of  solution  because  the 
methods  for  adjusting  such  disputes  which  are  provided  by  the 
.American  Federation  of  Labor  are  being  applied. 

It  requires  no  elaborate  investigation  of  the  facts  to  dis- 
cover that  the  industrial  form  of  organization,  or  "One  Big 
Union,"  would  equally  fail  to  solve  questions  of  jurisdiction, 
unless  everyone  in  industry  was  placed  upon  the  same  dead  level, 
which  is  something  which  nature  itself  would  not  allow  to  exist, 
for  nature  is  continually  making  changes,  continually  modifying 
conditions,  continually  establishing  new  forms. 

1  Bt  John  P.  Frey,  Amalgamated  Journal  of  Iron  and  Steel  Workers. 
DecemDer,  1919.  Thi.i  article  represents  the  point  of  view  of  organized 
labor.— Ed. 


PROBLEMS   OF   LABOR  287 

Someone  has  advocated  that  the  electrical  trades  should  form 
an  industrial  union.  This  would  mean,  among  other  things, 
that  the  pattern  makers,  machinists,  molders,  blacksmiths, 
polishers,  armature  winders  and  other  workmen  on  electrical 
machinery  would  all  be  the  members  of  an  industrial  electrical 
workers'  union.  In  addition  to  this  it  would  be  necessary  that 
all  of  the  linemen,  and  all  of  the  men  wiring  buildings,  should 
also  be  members  of  this  one  organization.  The  electricians  em- 
ployed in  the  erection  of  buildings  might  possibly  raise  a  ques- 
tion of  nothing  compared  to  what  would  follow  if  the  proposed 
scheme  would  go  into  effect  and  would  include  not  only  all  of 
the  telegraph  operators,  at  which  step  the  railroad  brotherhoods 
would  step  in,  but  also  the  electricians  employed  in  theaters. 
These  would  also  be  members  of  the  electrical  workers'  union, 
for  it  was  to  be  all-embracing  so  far  as  those  connected  with 
any  form  of  the  electrical  industry  were  concerned.  The  very 
extension  of  this  organization  to  stage  employes  would  imme- 
diately lead  to  jurisdictional  complications  with  stage  employes 
and  actors'  unions. 

Delightful  in  Theory 

Many  a  theory  is  delightful  to  contemplate  until  we  begin  to 
put  it  into  operation. 

It  seems  logical  to  those  who  advocate  the  industrial  form 
of  organization,  so  that  jurisdictional  disputes  may  be  elimi- 
nated, that  the  transport  workers  should  get  members  of  but 
one  organization. 

Those  engaged  in  transportation  are  the  seamen,  the  railroad 
operators,  the  men  in  the  railroad  shops,  the  longshoremen,  and 
the  teamsters. 

If  such  a  form  of  organization  could  possibly  be  brought 
into  existence  how  would  it  be  possible  for  the  teamster  to  have 
proper  attention  given  to  his  particular  necessities  when  they 
differ  as  widely  as  they  must  from  those  of  the  seamen? 

The  whole  structure  of  industrialism  becomes  ridiculous  as 
soon  as  we  begin  to  study  what  would  follow  the  thorough- 
going application  of  this  form  of  organization. 

There  are  those  who  imagine  that  jurisdictional  problems 
are  due  to  the  form  of  organization  which  trade-unionism  has 
developed. 

Nothing  could  be  farther  from  the  facts.  As  far  back  as  we 
can  find  references  to  the  problems  which  organized  workers 
were  dealing  with,  we  find  traces  of  jurisdictional  disputes  as 
bitter  and  more  violent  than  those  of  today. 


288  SElJ-:CTi:i)    ARTICLES 

Four  Centuries  Back 

In  tlic  I3tli  and  i6th  century,  shipbuilding  was  a  prominent 
industry  along  the  banks  of  the  River  Hull  in  England.  The 
woodworkers  of  that  period  were  all  members  of  their  respective 
guilds,  three  of  which  were  in  active  existence  at  that  time. 
The  Shipwrights'  Guild  whose  members  built  the  house,  and  the 
Joiners'  Guild,  whose  members  worked  on  furniture,  cabinet 
work,  and  other  of  the  finer  parts  of  wood-working. 

During  the  bitter  cold  months  of  winter  the  shipwrights 
could  not  work  in  the  yards  and  they  frequently  endeavored  to 
do  some  carpentry  work. 

During  the  fall  months  the  carpenters  were  frequently  idle 
and  endeavored  to  work  in  the  shipyards ;  and,  at  various  time, 
the  joiners  endeavored  to  do  some  of  the  shipwrights'  w'ork  in 
the  interior  of  the  ship  after  the  hold  had  been  completed  and 
the  decks  boarded  over. 

Their  jurisdictional  disputes  led  to  violent  encounters  and 
the  records  of  the  River  Hull  Guilds  are  filled  with  interesting 
examples  of  the  methods  adopted,  the  by-laws  enacted  and  the 
instructions  given  to  committees,  all  aiming  to  give  that  partic- 
ular guild  advantage  over  the  others  in  its  jurisdictional  dispute. 

There  was  no  federation  of  guilds,  enabling  the  quarreling 
factions  to  come  under  the  influence  of  others  whose  only  de- 
sire was  to  find  a  wise  solution  of  the  jurisdictional  problem 

One  of  the  interesting  examples  of  jurisdictional  disputes 
among  English  workers  arose  from  a  quarrel  betw^een  the  Cord- 
wainers'  Guild  (shoemakers)  and  the  Cobblers'  Guild  (shoe- 
menders)   of  London  in  the  latter  part  of  the  14th  century. 

The  Cordwainers'  Guild  claimed  jurisdiction  over  the  making 
and  mending  of  all  shoes.  The  municipal  records  of  ancient 
London  contain  several  references  of  the  methods  liy  which 
this  jurisdictional  dispute  was  carried  cnu. 

Strong- Ann  Methods 

Among  other  efforts  to  gain  supremacy,  the  wardens  of  the 
Cordwainers'  Guild,  who  evidently  acted  as  strong-arm  business 
agents,  visited  the  cobblers'  shops,  beat  up  the  cobblers,  broke 
their  stools  and  benches,  destroyed  their  little  stocks  of  leather 
and  appropriated  their  tools. 

In  the  summer  of  1395,  while  the  King  was  making  a  formal 
entry  into  London,  the  officer?  of  the  Coblers'  Guild  presented 


PROBLEMS   OF   LABOR  2S9 

a  petition  to  him,  requesting  that  their  riglits  be  safeguarded 
and  their  jurisdiction  defined.  Of  course  the  King  would  not 
personally  give  his  attention  to  such  a  subject,  but  he  instructed 
the  Lord  Mayor  to  adjust  the  jurisdictional  dispute.  The  Lord 
Mayor  ordered  both  of  the  guilds  to  send  twelve  of  their  mem- 
bers before  him.  He  listened  to  what  these  twenty-four  shoe- 
makers and  cobblers  had  to  say  and  then  he  handed  down  the 
decision  of  a  Solomon. 

He  defined  the  lines  of  jurisdiction,  giving  the  Cordwainers' 
Guild  the  making  of  all  boots  and  shoes  and  tlic  mending  of 
shoes  which  they  themselves  had  made.  He  also  defined  the 
kinds  of  leather  which  could  be  used  exclusively  b}'  shoemakers. 
He  gave  the  Cobblers'  Guild  complete  jurisdiction  over  the 
mending  of  shoes  brought  to  them,  and  also  defined  the  kind 
of  leather  which  they  might  use,  and  went  so  far  as  to  provide 
that  they  could  not  evade  his  decision  and  become  shoemakers 
l)y  accepting  the  latch-hok  of  a  shoe  and  building  a  new  shoe 
around  it. 

Fortunately,  the  jurisdictional  disputes  between  organized 
workers  which  arise  in  America  are  not  settled  by  the  civil  au- 
thorities. As  they  arise  they  arc  adjusted  by  the  American  Fed- 
eration of  Labor  in  its  annual  conventions.  Some  disputes  have 
not  been  adjusted  immediately;  it  has  reqinrcd  time  U>  clear 
men's  minds  and  to  lead  them  to  realize  that  the  good  judg- 
ment of  the  trade  union  movement  as  a  whole  was  probabl}'  as 
sound  as  their  own. 

Satis  facto  ry  A  djust  m  cuts 

But  the  serious  jurisdictional  disputes  whicli  have  at  times 
threatened  harmony  within  the  trade  union  mo\-ement  have, 
with  few  exceptions,  been  adjusted  to  the  satisfaction  of  all 
concerned. 

The  effectiveness  of  the  American  cradc  union  movement  is 
not  to  be  judged  by  the  number  of  jurisdictional  disputes  which 
arise!  rather  it  is  to  be  judged  by  the  numl)cr  of  these  disputes 
which  it  has  been  able  to  adjust. 

As  we  indicated,  jurisdictional  disputes  arise  a. id  must  con- 
tinue to  arise  because  of  the  wonderful  changes  which  take 
place  in  our  modern  industry.  The  all-important  thing  is  not 
the  construction  of  an  organization  which  the  theorist  believes 
would  prevent  jurisdictional  disputes.  To  (he  practical-minded 
man    of    experience    in    the  industrial   world,    the   all-important 


290  SELECTED   ARTICLES 

question  is  the  adoption  of  methods  through  whicli  these  dis- 
putes can  be  adjusted  when  they  arise. 

The  record  of  the  American  trade  union  movement  indi- 
cates that  it  has  proven  more  successful  than  any  other  move- 
ment in  adjusting  jurisdictional  disputes  when  they  arise.  It 
has  not  followed  the  method  which  was  carried  out  by  the 
workers  in  the  guilds  of  centuries  ago.  It  has  not  depended 
upon  the  authorities  acting  as  a  judge,  or  upon  the  miUtant 
strength  of  members  alone.  It  has  been  governed  by  common 
sense,  guided  b^'  the  knowledge  that  trade  union  experience  in 
trade  union  methods  is  the  surest,  safest  method  for  the  solu- 
tion of  jurisdictional,  or  any  other  questions  which  affect  the 
workers. 


THE   ATTITUDE  OF  THE  COURTS   TOWARDS 
INDUSTRIAL    PROBLEMS' 

Alodern  industry  with  its  rapidly  changing  conditions  has 
placed  a  heavy  burden  of  responsibility  upon  our  courts.  Diffi- 
culties of  adjustment  unknown  until  recently  have  given  rise 
to  strife  involving  individual  rights  and  social  welfare.  These 
contests  have  been  taken  to  court.  There  the  old-established 
principles  constitute  the  standards.  But  these  are  not  applicable 
to  new  conditions.  Thus  the  courts  face  the  necessity  of  trying 
to  perform  new  tasks  with  old  tools.  Upon  their  ability  to 
adjust  themselves  to  the  new  requirements  depends  the  peacefiH 
solution  of  some  of  our  most  perplexing  industrial  problems. 
The  responsibility  is  two-fold:  first,  that  of  passing  on  legisla- 
tion that  departs  from  former  standards,  and  second,  that  of 
adjusting  individual  rights  under  conditions  where  collective 
activity  prevails. 

With  the  importance  that  is  attached  to  precedent,  it  is  im- 
fortunatc  that  so  many  cases  have  been  decided  in  the  past  in 
a  manner  contrary  to  the  public  welfare.  This  thwarting  of  the 
public  interest  has  generally  resulted  from  a  purpose  to  protect 
private  interests  and  especially  private  property.  Many  of  these 
cases  are  so  widely  known  and  the  results  so  far  beyond  dispute 
that  brief  mention  of  them  will  suffice. 

Although  the  Afassachusetts  court  decided  in  favor  of  a  law 

1  By  George  G.  Groat.  Annals  of  the  American  Academy.  44:104  13. 
November,  1912. 


PROBLEMS   OF   LABOR  291 

restricting  the  hours  of  labor  for  women  as  long  ago  as  1876, 
the  court  in  Illinois,  in  1895,  refused  to  allow  such  a  law  to 
stand.  It  was  an  infringement  upon  the  private  right  of  citizens 
to  contract  for  the  length  of  day.  The  appeal  of  a  case  from 
the  Oregon  court  to  the  federal  supreme  court  and  the 
elaborate  opinion  upholding  the  public  necessity  of  such  legis- 
lation has  finally  saved  the  situation.  A  new  standard  for  such 
legislation  has  been  established.  The  crux  of  interest  was 
reached  when  the  Illinois  court,  facing  the  material  and  the  ' 
weight  of  authority  of  the  nation's  highest  tribunal,  finally  re- 
versed its  own  decision.  The  influence  of  the  supreme  court 
of  the  United  States  has  been  potent  in  several  states  since,  and 
uniformly  the  principle  is  sustained.  It  should,  however,  be 
noted  that  in  New  York  a  decision  still  stands  which  holds 
invalid  a  law  prohibiting  women  from  working  in  certain  in- 
dustries during  night  hours.  This  legislation  the  New  York 
court  regards  as  an  infringement  upon  the  individual  rights  of 
some  of  its  citizens. 

The  effort  to  restrict  the  hours  of  labor  in  underground 
mines  affords  another  instance  of  failure  to  appreciate  the  im- 
portance of  public  welfare  above  private  interest.  In  Colorado 
an  eiglit-hour  law  was  passed  applicable  to  mines  and  smelters. 
The  supreme  court  of  the  state  held  the  law  unconstitutional. 
This  opinion,  both  in  point  of  conclusion  reached  and  of  reason- 
ing, is  one  of  the  most  unsatisfactory  and  unconvincing  that 
any  of  our  courts  has  handed  down.  There  appears  to  have 
been  more  behind  it  than  simple  legal  considerations,  if  the  fol- 
lowing statements  may  be  taken  with  authority.  Writing  in  the 
Century  Lazv  Journal  (vol.  62,  p.  379  note),  A.  A.  Bruce  asserts 
that  the  case  of  In  re  Morgan  "is  so  evidently  the  result  of 
pique  and  injured  dignity,  arising  out  of  the  fact  that  the  legis- 
lature disregarded  the  suggestions  made  by  the  court  in  the  prior 
case  of  In  re  house  bill,  21  Colo.  29,  that  it  is  worthy  of  but 
little  consideration."  Judge  Lindsey,  in  Everybody's  Magazine 
(Vol.  22,  p.  242  note),  says  that  "Even  the  laboring  men,  during 
these  troubles,  recognized  that  Judge  Campbell's  decisions  were 
those  of  an  honest  prejudice  due  to  his  training  and  his  tempera- 
ment." This  opinion  was  held  b}'  the  Colorado  court  in  spite 
of  the  fact  that  the  same  principle  had  been  sustained  by  the 
supreme  court  of  Utah,  had  been  appealed  to  the  federal  court 
and  there  supported.  This  victory  for  tlic  Utah  measure  did 
not  assist  in  securing  support  for  the  Colorado  law. 


292  SELECTED   ARTICLES 

WJiile  the  United  States  supreme  court  has  these  two  de- 
cisions to  its  credit,  there  is  another  side  to  the  account.  One 
case  is  that  of  the  New  York  bakeshop  law.  One  of  the  pro- 
visions of  this  law  was  the  limitation  of  the  hours  of  labor  for 
those  working  in  bakery  and  confectionery  establishments.  The 
highest  court  of  the  state  on  appeal  sustained  the  law.  The  su- 
preme court  of  the  United  States  held  it  unconstitutional.  In 
this  unusually  interesting  case  twenty-two  judges  were  on  the 
'benches  of  the  several  courts.  Of  these,  twelve  in  all  voted  in 
favor  of  the  law.  In  the  highest  state  court  it  was  sustained  by 
a  majority  of  one,  and  in  the  federal  court  it  was  overthrown 
by  the  same  narrow  majority.  Five  opinions  were  written  by 
the  New  York  judges  and  three  in  the  federal  court.  Much  of 
the  argument  that  led  to  the  annulling  of  the  law  is  of  the  ex- 
treme conservative  tj-pe.  In  some  parts  the  opinions  even  border 
upon  an  attempt  at  the  facetious,  as  where  Judge  Bartlett  writes 
that  the  claims  of  danger  to  health  in  this  industry  "will  surprise 
the  bakers  and  good  housewives  of  this  state;"  and  further  that 
the  risks  to  health  shown  in  the  evidence  are  "not  to  be  con- 
founded with  the  avocation  of  the  family  baker,  engaged  in  the 
necessary  and  highly  appreciated  labor  of  producing  bread,  pies, 
cakes  and  other  commodities  more  calculated  to  cause  dyspepsia 
in  the  consumer  than  consumption  in  the  manufacturer."  This 
opinion  is  to  be  classed  as  one  of  the  most  reactionary.  The  re- 
sults were  disastrous  to  a  much-needed  reform.  Tiic  findings 
of  a  commission,  the  legislation  based  on  those  findings,  and 
the  views  of  the  majority  of  the  state's  highest  court  all  were 
set  aside  as  unreasonable.  The  measure  interfered  with  private 
rights.  If  the  results  are  to  be  secured  now  it  must  be  through 
the  insistance  of  the  liakers  with  prospects  for  a  strike  and 
much  industrial  loss.  A  further  influence  of  this  decision  mani- 
fested itself  as  late  as  1910  when  the  supreme  court  ot  Missouri 
on  the  authority  of  this  opinion  invalidated  a  law  of  that  state, 
one  of  the  provisions  of  which  restricted  bakers  to  a  six-day 
week. 

Even  the  briefest  reference  to  this  class  of  cases  should  not 
omit  the  widely  known  New  York  tenement  house  case.  It  has 
been  the  bulwark  of  protection  of  private  property  rights  against 
public  interests  and  in  the  view  of  most  eminent  authority  it  is 
directly  responsible  for  the  existence  of  tenement  house  prob- 
lems, slums  and  sweatshops  in  all  of  our  large  cities.  The  opin- 
ion, it  will  be  remembered,  denied  the  constitutionalitv  of  a  law 


PROBLEMS    OF   LABOR  293 

prohibiting  the  manufacture  of  cigars  in  tenement  houses.  The 
basis  of  the  opinion  was  the  freedom  of  the  property  owner  to 
the  income  from  his  tenement  houses  and  the  freedom  of  the 
occupant  to  engage  in  his  own  home  in  any  occupation  that 
pleased  him.  That  is  to  say,  the  law  was  a  violation  of  personal 
liberty  and  private  property  when  conditions  as  understood  by 
the  court  did  not  warrant  it.  In  this  opinion  the  justices  strayed 
so  far  from  the  reality  of  the  present-day  tenement  life  as  to 
refer  to  the  situation  created  by  the  law  as  one  that  was  in- 
tended to  improve  the  health  or  the  morals  of  the  cigar-maker 
"by  forcing  him  from  his  home  and  its  hallowed  surroundings 
and  beneficent  influences  to  ply  his  trade  elsewhere." 

Space  will  not  allow  even  brief  reference  to  the  experience 
of  man}'  of  the  states  with  social  legislation.  The  socially 
necessary  measures  have  often  been  subjects  for  legislation 
which  courts  have  many  times  been  called  upon  to  test  in  the 
light  of  constitutionality.  In  some  instances  the  laws  have  been 
upheld  while  in  others  they  are  annulled.  The  grounds  on 
which  the  decisions  arc  based  are  quite  uniformly  the  unwar- 
ranted interference  w'ith  property  rights,  individual  rights  and 
rights  of  contract.  Industrial  peace  depends  so  directly  upon 
the  enactment  of  such  laws  that  until  courts  come  to  view  them 
as  in  accord  with  social  necessity,  and  therefore  not  contrary  to 
the  requirements  of  the  constitution,  there  must  remain  elements 
of  discord. 

Turning  from  this  field  of  legislation  it  is  necessary  to  con- 
sider the  attitude  of  the  courts  when  the  activities  of  labor  or- 
ganizations are  involved.  Here  there  is  also  confusion.  The  ' 
difficult  problem  is  in  adjusting  individual  rights  established  in 
a  day  when  industrial  relations  were  simple  to  rights  of  groups 
in  collective  activity  with  industrial  relations  highly  complex. 
The  difficulties  and  the  disagreements  may  well  be  illustrated  by 
reference  to  strikes  and  boycotts.  Slowly  the  right  to  strike 
freed  itself  from  the  charge  of  conspiracy  and  came  to  be  gen- 
erally recognized  by  the  courts.  But  what  are  the  limitations 
upon  this  right?  The  courts  are  not  in  agreement  in  their 
answer.  Two  views  obtain  and  they  are  irreconcilable.  One 
may  be  distinguished  as  the  Massachusetts  view  and  the  other 
as  the  New  York  view.  The  former  has  been  adopted  in  the 
majority  of  decisions.  In  the  opinion  of  the  Massachusetts 
court,  as  summed  up  by  Judge  Loring,  "the  legality  of  a  strike 
depends  .  .  .  upon  the  purpose  for  which  the  employees  strike." 


294  SELECTED    ARTICLES 

In  support  of  this  view,  and  in  further  definition  of  it,  the  same 
court  has  more  recently  said  that  "whether  the  purpose  for 
which  a  strike  is  instituted  is  or  is  not  a  legal  justification  for 
it  is  a  question  of  law  to  be  decided  by  the  court.  .  .  .  The 
strikers  must  in  good  faith  strike  for  a  purpose  which  the  court 
decides  to  be  a  legal  justification  for  such  interference.  .  .  . 
A  strike  is  not  a  strike  for  a  legal  purpose  because  the  strikers 
struck  in  good  faith  for  a  purpose  which  they  thought  was  a 
sufficient  justification  for  a  strike."  The  court  nowhere  defines 
the  legal  purpose  in  such  a  way  that  unions  may  be  guided  by 
the  definition.  Each  instance  must  come  as  a  separate  case  to 
i)e-decided  on  its  merits. 

Compared  with  this  view,  that  of  the  New  York  court  seems 
extreme.  As  formulated  by  Chief  Justice  Parker  it  held  in  the 
most  unqualified  way  that  laborers  may  strike  for  any  reason 
that  seems  to  them  sufficient.  These  reasons  they  need  not 
even  state.  If  they  do  choose  to  express  them  "their  right  to 
stop  work  is  not  cut  off  because  the  reason  seems  inadequate 
or  selfish  to  the  employer  or  to  organized  society."  Here  is  a 
situation  that  contributes  to  industrial  restlessness,  and  evi- 
dently must  continue  to  do  so  as  long  as  a  strike  that  is  legal  in 
one  state  would  not  be  regarded  by  the  court  of  another  com- 
monwealth. 

Though  boycotts  are  so  generally  connected  with  strikes  ihe 
courts  treat  them  on  quite  different  principles.  The  motive  is 
generally  held  as  material,  and  as  it  is  to  harm  the  business  of 
another  in  order  to  force  a  concession  on  the  part  of  its  owner, 
that  motive  is  easily  understood  to  be  unlawful.  As  to  the  pres- 
ent legal  status  of  boycotts  there  can  be  no  doubt.  In  some 
states  they  have  been  the  subject  of  statutory  enactment.  Courts 
have  decided  very  positively  against  them.  The  United  States 
supreme  court  has  held  that  they  are  not  only  in  violation  of 
freedom  of  interstate  commerce  but  are  violative  of  common 
law  rights  of  property.  "There  is  no  doubt,"  it  declares,  "that 
at  common  law  evpry  person  has  individually,  and  the  public 
also  has  collectively,  a  right  to  require  that  the  course  of 
trade  should  be  kept  free  from  unieasonable  obstructions."  In 
the  Bucks  Stove  and  Range  boj'cott  case  this  same  court  i-efers 
to  printed  statements  such  as  "unfair"  and  "we  don't  patronize" 
as  "verbal  acts"  expressive  of  "force  not  inhering  in  the  words 
themselves,  and  therefore  exceeding  any  possible  right  of  speech 
which  a  single  individual  might  have."      In  spite  of  these  ex- 


PROBLEMS   OF   LABOR  205 

pressions,  other  opinions  indicate  that  a  distinction  is  beginning 
to  appear.     While  the  development  is  much  tardier  than  in  the 
case  of  strikes,  there  is  a  positive  note  indicating  that  the  boy- 
cott is    not    to    be  uniformly    condemned.     If    practiced  within 
limits  it  is  allowed  in  some  jurisdictions.    Even  the  principle  ac- 
cepted by  the  federal  court  is  not  followed  by  some  state  courts. 
The  line  of  reasoning  in  these  latter  cases  is  too  long  to  trace 
here.     Four  opinions  may  be  introduced  as  evidence,  however: 
Payne   v.   Western  Atlantic  Railroad   Co.    (Tennessee,   49   Am. 
Rep.  666)  ;  Marx  &  Haas  Jeans  Clothing  Co.  v.  Watson   (Mis- 
souri, 67  S.  W.  391)  ;  Lindsay  &  Co.  v.  Montana  F.  of  L.  (Mon- 
tana, 96  Pac.   127)  ;  Parkinson  Co.  v.  Building  Trades  Council 
(California  98  Pac.  1027).     In  a  still  later  case,  Pierce  v.  Stable- 
men's Union,  the  California  court  goes  even  further  in  refusing 
to  declare  a  boycott  per  se  illegal.     It  argues  that  one  may  be- 
stow or  withhold  his  patronage  as  it  may  please  him,  thus  placing 
the  boycott  on  the  same  broad   principle  as  the   strike.     With 
primary    goes    the    secondary    boycott,  in    the  opinion    of  this 
court.    Going  further,  perhaps,  than  any  other  opinion,  it  is  held 
that  strikers  may  engage  in  a  boycott;  meaning  that  they  may 
withdraw    social    and    business    intercourse    by    all   legitimate 
means,  and  by  "fair  publication  and   fair  oral  or  written  per- 
suasion"   may   induce   others   to    do   the    same.      They   may   go 
further  and  use  "moral  intimidation  and  coercion"  to  "threaten" 
a  like  boycott,  thus  bringing  in  third  persons,  a  secondary  boy- 
cott.    Here  the  court  takes  what  it  characterizes  as   "advance 
ground"  and  "recognizes  no  substantial  distinction  between  the 
so-called  primary  and  secondary  boycott."     Each  of  these  forms 
rests  upon  the  right  of  the  union  to  control  its  own  patronage 
and  to  induce  by  fair  means  others  to  do  the   same.     As  the 
unions    would    have   the    "unquestioned    right    to    withold    their 
patronage    from    a   third   person    who    continued   to    deal    with 
their  employer,"  they  must  have  the   right   to   notify  them   of 
their  intended  action. 

Such  are  some  of  the  differences  that  have  developed  in  the 
effort  to  formulate  out  of  the  old  material  principles  that  will 
be  adaptable  to  the  conditions  of  industry  that  prevail  to-day. 
As  with  social  legislation  so  in  these  instances  evidence  is  not 
wanting  that  courts  are  making  a  distinct  contribution  to  the 
interests  of  industrial  peace,  though  disturbing  elements  are  still 
present. 

It  is   evident  that  before   our   courts   can   make   themselves 


20  Sl-JJ'XTKD   AUTICLES 

of  the  highest  usefulness  in  solving  the  perplexing  problems  of 
the  present  and  in  establishing  more  firmly  peaceful  relations 
in  industry,  some  very  important  changes  must  be  made  in  their 
attitude.  In  a  more  elaborate  study  the  writer  has  endeavored 
to  show  more  in  detail  the  important  elements  of  this  situation. 
In  "The  Attitude  of  American  Courts  in  Labor  Cases,"  extracts 
from  a  lartjc  number  of  opinions  are  brought  together  from 
which  conclusions  are  drawn.  Stated  briefly  because  of  the  limi- 
tations of  space  these  necessary  changes  must  include  the  fol- 
lowing. 

The  sacrcdness  of  precedent,  an  exaggerated  form  of  respect 
for  former  opinions  and  an  overdone  desire  to  preserve  con- 
tinuity in  legal  decisions,  undoubtedl}'  result  in  checking  health- 
ful line.-  of  progress  and  estopping  some  highly  beneficial  legis- 
lation. The  courts  exhibit  at  times  an  almost  blind  devotion  to 
this  principle,  and  so  long  as  thej'  continue  in  this  extreme  the 
cause  of  industrial  peace  must  suffer.  Adherence  to  precedent 
must  I'C  less  rit.'id.  If  conditions  have  so  changed  as  to  alter 
the  applicability  of  a  legal  principle,  the  knowledge  of  such  con- 
ditions must  be  as  clear  and  keen  in  the  minds  of  the  court  as 
that  of  the  principle.  This  will  bring  greater  freedom  from  the 
binding  force  of  precedent  and  a  correspondingly  wider  margin 
for  variation  to  suit  new  conditions.  There  can  be  no  doubt 
tiiat  blindness  to  conditions  has  led  courts  In  the  past  into  seri- 
ous error,  as  tlicy  have  insisted  on  enforcing  a  principle  where 
conditions  were  no  longer  suitable  for  such  a  course. 

Legal  training,  accountable  for  much  that  is  reactionary, 
must  be  changed.  Severe  comment  on  the  content  of  text-books, 
on  the  law's  backward  look  and  on  the  stereotyped  phrase  is 
already  beginning  to  appear.  The  pages  of  law  magazines  are 
speaking  in  open  criticism  of  the  past  and  expressing  clearl>- 
formed  demands  for  the  fulme  to  llic  end  that  courses  of  law 
be  modernized  and  socialized.  The  relation  between  sociology 
and  jurisprudence  is  a  topic  both  timely  and  profitable.  Some 
of  our  leading  jurists  have  already  indicated  a  sense  of  responsi- 
bility to  the  present  as  well  as  the  past.  The  number  is  increas- 
inti.  The  sentiment  thai  Indicates  hope  for  the  future  has  been 
well  expressed  by  Mr.  justice  Holmes:  "In  my  opinion  econ- 
omists and  sociologists  are  the  people  to  whom  we  ought  to 
turn  mrve  than  we  do  foi  Instruction  in  the  grounds  and  fo^m- 
d:itions  of  al'  rational  dc(-isions."  Speaking  again,  this  dis- 
tinguished jurist  declares  that  "the  true  grounds  of  decision  are 


PROBLEMS    OF    LABOR  297 

considerations  of  policy  and  of  social  advantage,  and  it  is  vain 
to  suppose  that  solutions  can  be  attained  merely  by  logic  and 
general  propositions  of  law  which  nobody  disputes."  That  an 
increasing  number  of  judges  appear  to  be  adopting  the  principles 
thus  expressed,  though  in  our  haste  the  increase  may  seem 
exasperatingly  slow,  is  an  element  that  greatly  brightens  the 
outlook.  Yet  changes  in  this  direction  must  come  at  a  greater 
pace,  as  at  best  they  can  manifest  their  results  but  slowly. 

The  former  views  of  individual  rights  must  be  decidedly 
modified.  They  must  be  given  a  social  content.  The  possibil- 
ity of  individual  rights  remaining  unmodified  amid  rapidly 
changing  conditions  of  society  is  very  remote  indeed.  While  the 
declarations  of  rights  in  our  constitutions  have  uniformly  de- 
clared in  general  terms  for  equality  of  personal  rights,  such 
rights  have  never  been  uniform  in  fact.  Applicable  at  first  to 
civil  conditions  they  are  now  being  carried  over  into  the  in- 
dustrial field.  Here  the  equality  has  been  less  evident.  Yet  our 
courts  have  not  fully  realized  this  and  have  continued  to  use 
expressions  once  full  of  meaning  in  real  life  but  now  quite 
empty.  Judges,  as  well  as  others,  must  apply  what  is  really 
a  very  commonplace  fact,  that  where  there  is  a  practically  un- 
equal distribution  of  rights,  and  an  effort  is  made  to  equalize  it, 
rights  and  privileges  can  be  enlarged  on  one  side  only  by  cur- 
tailing those  on  the  other.  To  continue  to  insist  on  the  inalien- 
able right  of  one  in  face  of  an  expanding  right  of  another  is 
highly  impractical.  The  slave  had  nothing  to  say  concerning 
his  condition.  The  owner  had  unrestrained  freedom.  It  was 
impossible  to  free  the  slave  without  a  corresponding  limitation 
of  the  rights  of  the  former  master.  Under  conditions  of  in- 
dividual wage  contract  it  may  fairly  be  assumed  that  in  an 
earlier  generation  the  rights  to  contract  were  about  equal. 
More  and  more  it  is  now  true  that  men  are  employed  by  proxy 
and  are  hired  in  gangs.  Conditions  of  labor  are  fixed  by  the 
employer  and  the  laborer  may  accept  them  or  let  the  work 
alone.  Collective  bargaining  is  one  means  of  equalizing  the 
situation.  Yet  when  this  method  becomes  so  effective  as  to  turn 
the  tables  against  the  employer  and  leave  him  a  similar  alter- 
native, courts  see  differently.  The  federal  supreme  court  in 
the  Bucks  Stove  and  Range  boycott  case  discovers  the  in- 
equality when  it  says,  "But  the  very  fact  that  it  is  lawful  to 
form  these  bodies  [labor  unions],  with  nmltitudes  of  members, 
means   that   they  have   thereby   acquired   a   vast   power,   in   the 


298  SELECTID   ARTICLES 

presence  of  which  the  individual  may  be  helpless."  When  col- 
lective bargaining  has  not  accomplished  a  needed  result,  legis- 
latures have  sought  to  equalize  the  conditions  by  statute.  Some 
courts  accept  such  measures  as  of  practical  necessity.  Others 
reject  them.  The  course  of  procedure  in  cases  where  these 
laws  are  overthrown  is  quite  uniform.  The  argument  presented 
is  that  the  law  is  an  infringement  upon  rights  of  contract.  The 
employee  is  not  at  liberty  to  contract  for  long  hours,  irregular 
pay  or  some  other  conditions  unfavorable  to  him.  The  em- 
ployer thus  takes  up  the  fight  in  behalf  of  his  employee  whom 
the  legislature  is  seeking  to  deprive  of  his  constitutional  rights. 
Hearing  these  rights  expressed  in  the  conventional  form  of 
individual  relations,  the  courts  lose  sight  of  the  conditions  that 
really  determine  the  situation  and  the  decision  is  handed  down 
in  favor  of  the  emploj'er's  contention.  Be  it  said  that  at  least 
twice  the  court  has  seen  the  real  situation  in  the  case.  Once 
the  Washington  court  points  out  that  the  law  is  contested  only 
by  contractors  who  would  reap  benefits  by  the  law's  repeal. 
Again,,  the  federal  supreme  court  shows  that  the  employer 
virtually  claims  that  the  act  "works  a  peculiar  hardship  to  his 
c'lv.ployees  whose  right  to  labor  as  long  as  they  please  is  alleged 
to  be  thereby  violated."  The  opinion  adds  significantly,  "the 
argument  would  certainly  come  with  better  grace  and  greater 
cogency  from  the  latter  class."  Such  interpretations  of  indi- 
vidual rights  in  modern  industry  as  have  been  made  in  many 
of  these  cases  cannot  contribute  much  hopefulness  for  con- 
tinued industrial  peace.  It  is  one  of  the  lines  in  which  most 
serious    consequences    follow.      Constitutions    arc    made    instru- 

lents  for  depriving  of  their  rights  the  very  ones  whom  they 
are  intended  to  protect  and  who   stand  most  in   need  of  their 

rotcction.      A    restatement   of    constitutional    rights    in    terms 
social  rather  than  individual  is  a  change  that  is  imperative. 

Finally,  a  matter  of  prime  importance  in  the  interests  of  in- 
dustrial peace  is  the  attitude  that  courts  take  toward  the  com- 
mon law.  Common  law  is  essentially  changing  in  its  nature. 
To  contend  that  it  has  the  permanency  of  the  constitution 
seems  wholly  untenable.  Yet  such  appears  to  be  the  view  of 
some  courts.  The  opinions  in  the  recent  cases  of  workmen's 
compensation  may  be  taken  in  evidence,  as  they  clearly  show 
a  difference  of  view  and  a  tendency  to  confuse  the  common 
law  with  the  principles  of  the  constitution.  In  all  of  these 
cases  it  is  freely  admitted  that  the  legislation  is  "economically. 


PROBLEMS    OF   LABOR  299 

sociologically  and  morally  sound."  To  speak  of  the  common 
law  as  adequate  to  the  problem,  declares  the  Wisconsin  court, 
"is  to  jest  with  serious  subjects,  to  give  a  stone  to  one  who 
asks  for  bread."  Speaking  more  directly  in  relation  to  the  com- 
mon law  the  Massachusetts  court  is  of  the  opinion  that  "the 
rules  of  law  relating  to  contributory  negligence  and  assump- 
tion of  the  risk  and  the  effect  of  negligence  by  a  fellow  servant 
were  established  by  the  courts,  not  by  the  constitution,  and  the 
legislature  may  change  them,  or  do  away  with  them  altogetTier 
as  defenses."  Compared  with  these  views  the  New  York  court 
manifests  a  different  attitude  toward  this  subject.  The  con- 
fusion appears  most  plainly  when  the  opinion  states  that  "The 
statute,  judged  by  our  common  law  standards,  is  plainly  revo- 
lutionary. .  .  .  The  radical  character  of  this  legislation  is  at 
once  revealed  by  contrasting  it  with  the  rule  of  the  common 
law.  .  .  .  Lender  our  form  of  government,  however,  courts 
must  regard  all  economic,  philosophical  and  moral  theories, 
attractive  and  desirable  though  they  may  be,  as  subordinate  to 
the  primary  question  whether  they  can  be  molded  into  statutes 
without  infringing  upon  the  letter  or  spirit  of  our  written  con- 
stitutions. .  .  .  When  our  constitutions  were  adopted  it  was 
the  law  of  the  land  that  no  man  who  was  without  fault  or 
negligence  could  be  held  liable  in  damages  for  injuries  sustained 
by  another.  ...  It  is  conceded  that  [the  liability  in  the  new 
law]  is  a  liability  unknown  to  the  common  law  and  we  think  it 
plainly  constitutes  a  deprivation  of  liberty  and  property  under 
the  federal  and  state  constitutions." 

In  discussing  thus  the  work  of  the  courts  it  must  not  be  in- 
ferred that  they  do  not  serve  a  useful  purpose.  Conservative 
forces  society  must  have  or  there  would  be  no  contirmity. 
Courts  conserve  our  former  experiences  and  enable  us  to  profit 
by  them.  So  long  as  changes  coine  slowly  there  is  time  for 
a  i^eadjustment  with  less  friction.  But  in  our  day  changes  come 
with  unparalleled  rapidit}'.  Friction  must  be  present  because 
of  the  very  nature  of  the  work  that  our  courts  have  to  do. 
It  may  be  greatly  lessened,  however,  if  judges  will  realize  the 
facts  and  endeavor  to  be  governed  by  them.  A  greater  degree 
of  socialization  must  come.  At  present  it  is  coming  without 
much  assistance  from  the  courts.  It  need  not  be  so.  With  such 
changes  accomplislied  as  have  been  indicated  the  progress 
toward  the  socialization  of  industries  will  be  rapid.  The  situ- 
ation cannot  be  summed  up  in  brief  better  than  in  the  words 


30O  SELECTED    ARTICLES 

of  the  opinion  from  the  Wisconsin  court:  "When  an  eighteenth 
century  constitution  forms  the  charter  of  Uberty  of  a  twentieth 
century  government,  must  its  general  provisions  be  constrned 
and  interpreted  by  an  eighteenth  century  m.ind  surrounded  by 
eighteenth  century  conditions  and  ideals?  Clearly  not.  This 
were  to  command  the  race  to  halt  in  its  progress,  to  stretch  the 
state  upon  a  veritable  bed  of  Procrustes." 


LIMITATION  OF  OUTPUT 

WHO    LIMITS    OUTPUT?^ 

Cost  of  living  has  been  rising  steadily  since  the  armistice 
of  nearly  a  year  ago.  It  has  risen  to  a  point  where  relief  must 
be  secured.  So  long  as  the  public  was  able  to  pay  it  paid,  though 
not  without  complaint.  Finally,  however,  the  point  of  inability 
to  pay  has  been  reached. 

The  high  cost  of  living  situation  has  not  been  without  its 
interest  for  Labor  which  must  find  itself  involved  in  every- 
thing which  has  to  do  with  the  life  of  the  people.  In  this  case, 
as  in  so  many  other  cases,  a  certain  section  of  the  public  press 
has  shown  its  willingness  to  misrepresent  the  position  of  labor, 
and  to  report  falsely  its  activities.  In  the  main,  there  have 
been  two  misstatements  that  end  to  give  the  public  a  discolored 
view  of  the  case.     These  are : 

1.  That  increases  in  wages  are  necessarily  followed  by  in- 
creases in  prices,  which  in  turn  are  followed  by  demands  for 
further  increases  in  wages,  to  be  again  followed  by  necessary 
increases  in  prices,  and  so  indefinitely  around  the  circle. 

2.  That  there  has  been  an  underproduction  of  goods,  due 
to  Labor's  determination  not  to  work  at  full  speed.  In  other 
words,  that  there  has  been  a  limitation  of  output  by  Labor. 

In  the  first  place  it  is  not  true  that  increases  in  wages  must 
be  followed  by  increases  in  prices  to  the  consuming  public. 
If  this  were  true  it  would  follow  that  profiteering  does  not 
exist.  It  needs  no  proof  here  to  establish  the  fact  that  profi- 
teering does  exist  and  has  existed  since  the  armistice,  if  not 
before.  So  high  an  authority  as  the  President  of  the  LTnited 
States  has  made  it  perfectly  plain  that  there  not  only  is  profi- 
teering but  that  this  profiteering  is  of  the  most  flagrant  and  un- 
justifiable nature,  and  that  it  wants  the  most  drastic  action  of 
the  nation  in   the  way  of  curtailment. 

The  fact  is  that  instead  of  higher  prices  being  made  neces- 
s.iry  by  higher  wages  the  reverse  is  the  case.     With  the  possible 

^  By    Samuel    Gompers.      International    Molders'    Journal,       s8-878-8i 
November,    19 19.  ^       c       •• 


302  SELECTED  ARTICLES 

exception  of  a  minor  example  here  and  there,  of  which  there 
is  no  record,  higher  wages  in  eveiT  case  have  been  made  neces- 
sary by  an  inflation  of  prices  which  has  made  it  impossible  for 
workmen  to  live  without  an  increased  income.  If,  following  in- 
crease in  wages,  prices  have  been  again  raised  it  is  not  because 
of  pressing  necessity  but  because  of  the  desire  for  greater  profit. 
Labor  has  been  compelled  to  engage  in  a  constant  and  bitter 
struggle  to  keep  wages  as  near  as  possible  to  the  ascending  scale 
of  prices. 

Instances  without  number  can  doubtless  be  discovered  where 
the  addition  of  a  fraction  of  a  cent  per  article  in  w^age  costs 
has  been  passed  on  to  the  consumer  by  the  addition  of  nickles 
and  dimes  and  quarters  in  the  cost  to  him.  If  a  workman  is 
compelled  to  face  an  increased  cost  of  living  of  a  dollar  per 
week  after  getting  a  wage  increase  of  lo  cents  per  week,  nothing 
remains  for  him  to  do  but  to  again  seek  a  wage  increase.  This 
is  exactly  what  is  being  done  throughout  the  country. 

It  may  be  conceded  that  the  supply  of  commodities  in  the 
world  is  below  normal.  It  is  a  fact  beyond  dispute  that  during 
the  period  of  the  war  much  of  the  world's  normal  productive 
capacity  was  turned  to  the  making  of  instruments  of  distruction, 
and  that  for  this  reason  and  for  the  reason  that  great  masses 
of  men  were  withdrawn  entirely  from  production,  the  supply  of 
commodities  for  normal  consumption  fell  far  below  the  average. 
But  it  is  also  true  that  the  people  everywhere  understood  the 
honest  and  actual  shortage  of  supplies  and  made  the  best  of  it. 
Where  there  still  exists  a  shortage  due  to  the  war  they  will 
continue  to  make  the  best  of  it,  providing  that  shortage  is  not 
aggravated  by  profiteering.  That  section  of  the  press  which  is 
not  given  to  being  overly  careful  in  statements  concerning 
Labor  is  likely  to  make  no  fine  distinction  between  shortage  of 
commodities  and  profiteering  in  commodities.  Nor  is  it  likely 
to  do  anything  that  will  remove  the  impression  that  Labor,  "by 
its  own  decision,  is  contributing  to  the  shortage  of  conunodi- 
ties  through  conscious  limitation  of  output. 

Typical  of  much  that  is  appearing  in  the  nation's  newspapers 
is  an  editorial  in  the  Chicago  Tribune  from  which  we  quote  the 
following: 

If  pre-war  energy,  expended  at  the  then  rate  made  possible  the  normal 
production  plus  enough  to  give  us  a  slight  surplus  during  the  war,  it  fol- 
lows that  we  can  not  replace  that  lost  surplus  and  atill  maintain  the 
normal    demand    by   any   lessening   of   energy. 

Prof.   H.  G.   Moulton   explains  that  high  prices   is  only  a   manifestation 


PROBLEMS    OF   LABOR  303 

of  shortage  and  that  obviously  the  shortage  must  be  made  up  before  normal 
conditions  can  return. 

"We  may  eliminate  all  profiteering — however  defined — (and  incidentally 
the  word  has  attained  a  brisk  and  spurious  meaning — Ed.)  sell  all  the  sup- 
plies the  government  still  possesses  .  .  ."  says  Prof.  Moulton,  '"compel 
the  emptying  of  all  storage  warehouses  .  .  .  and  we  might  temporarily  re- 
duce the  level  of  prices  by  perhaps  i  or  3  per  cent,  though  the  rcbult 
would  undoubtedly  be  higher  prices  a  few  months  hence.  .  .  ." 

We  must  not  delude  ourselves  into  believing  that  a  hard  fact  can  be 
dismissed  by  temporary  expediency.  The  fact  is  that  production  is  at  a 
low  mark.  It  must  be  restored  by  the  application  of  energy.  The  way  to 
have  more  food  is  to  produce  more  food.  When  food  is  plenty  it  will  be 
cheap.  It  is  possible  to  seize  such  stores  as  are  on  hand  and  distribute 
them  at  reduced  prices.  But  when  these  stores  are  gone  they  can  not  be 
replaced  instantly.     Prices  go  up  again. 

The  whole  tone  of  this  expression  is  that  the  producers  of 
the  world  are  not  producing,  that  the  working  people  are  not 
working  as  they  ought  to  work.  The  working  people  of  the 
United  States  have  never  considered,  much  less  adopted,  a 
policy'  of  limitation  of  output,  and  in  the  last  twenty  years  not 
even  has  any  appreciable  group  of  workers  followed  any  such 
policy.  It  is  foreign  to  every  principle  they  hold  and  foreign 
lo  the  whole  code  of  ethics  of  the  organized  labor  movement. 
It  can  not  be  too  emphatically  stated  that  there  is  on  the  part 
of  the  American  labor  no  limitation  of  output  of  any  character. 
The  contrary  fact  is  that  there  is  in  the  United  States  unem- 
ployment due  to  the  disinclination  of  employers  to  conduct 
their  establishments  at  full  capacity.  Those  who  think  with 
the  Chicago  Tribune  and  \vith  Professor  ^Moulton  are  thinking 
erroneously  and  in  giving  expression  to  their  thoughts  are  doing 
the  American  working  people  a  grave  injustice.  Furthermore, 
they  are  leading  the  general  public  to  false  conclusions  con- 
cerning the  remedy  of  the  conditions  and  are  therefore  doing 
the  nation  itself  the  most  serious  disservice.  It  follows  that  if 
the  nation  is  led  to  believe  in  an  erroneous  statement  of  causes 
it  will  arrive  at  erroneous  conclusions  regarding  a  remedy  and 
therefore  will  find  no  way  out  of  the  difficulty. 

The  trutli  of  the  situation  is  well  shown  in  a  report  to  the 
chairman  of  the  Council  of  National  Defense,  made  by  Gros- 
venor  B.  Clarkson,  director  of  the  council.  The  report  has  been 
transmitted  by  the  chairman  of  the  council  to  the  members  of 
Congress. 

The  report  discusses  most  of  the  basic  industries  of  the 
country  and  gives  figures  showing  the  extent  to  which  the  pro- 
ductive inachinerj'  of  the  country  is  idle. 

In  the  matter  of  clothing,  in  which  prices  have  been  alarm- 
ingly  increased,   the   report   says :    "The   production   of   civilian 


304  SELECTED   ARTICLES 

clothes  and  clothing  suffered  some  reduction  during  the  war, 
and  has  sniffered  heavy  curtailment  for  many  months  since  the 
signing  of  the  armistice." 

Housing  facilities  suffered  from  curtailment  of  production 
during  the  war  and  "for  many  months  following  the  armistice." 
The  report  makes  the  further  illuminating  statement  that  "the 
first  half  of  1019  shows  a  diminished  production  of  raw  ma- 
terials and  suhnormal  construction  of  new  capital  and  thus  in- 
dicates failure  to  utilize  an  adequate  proportion  of  our  pro-- 
ductivc  forces  in  the  preliminary  processes  of  provision  to  meet 
future  requirements." 

It  is  declared  that  for  one  reason  or  another,  "there  ensued 
after  the  armistice  the  disuse  of  a  large  proportion  of  America's 
productive  capacity." 

Certainly,  a  condition  of  this  character  can  by  no  process  of 
reasoning  be  attributed  to  the  working  people.  Mr.  Clarkson's 
report  also  makes  this  statement: 

The  very  fact  that  prices  of  finished  commodities,  consumption  gotuLs, 
so-called,  have  risen  to  an  cvtcnt  ont  of  proportion  to  the  rise  in  prices 
of  raiv  materials  and  perhap.s  out  of  proportion  to  the  rise  in  general  of 
wages,  indicates  that  production  and  distribution  carried  on  under  these 
conditions   is,   in   general    yielding  profits  abnormally  lifpti. 

A  condition  such  as  is  described  in  the  paragraph  just  quoted 
can  not  be  attributed  and  is  not  attributed  by  Mr.  Clarkson  to 
increased  wages  for  working  people.  Mr.  Clarkson's  report  indi- 
cates a  condition  of  profiteering.     It  is  just  that. 

In  the  matter  of  food  the  report  points  out  what  everyone 
must  be  aware  of:  the  nation's  food  producing  capacity  in- 
creased during  the  war,  a  fact  at  once  apparent  to  anyone  who 
considers  the  extent  to  which  the  Ignited  States  during  the  war 
supplied  the  world  with  food  products.  Yet  Mr.  Clarkson 
shows  that  "the  average  retail  prices  for  22  selected  articles  of 
food,  which  constitute  from  35  to  45  per  cent  of  the  total  ex- 
penditure of  typical  wage  earning  families,  had  increa'^cd  on 
May  15,  IQIO,  to  01  per  cent." 

It  is  further  set  forth  in  the  report  with  admirable  con- 
ciseness : 

The  high  cost  of  living,  in  that  sense  in  which  that  term  stands  for  a 
condition  of  economic  distress,  implies  not  merely  high  prices,  but  a  corre- 
sponding shortage  of  income  with  which  to  meet  those  prices  without  im- 
pairment of  the  standard  of  living.  The  high  cost  of  living,  in  this 
important  sense,   means  difficulty  in  securing   the   means  of  life. 

.\  striking  example  of  underproduction  due  to  no  forces 
over  which  Labor  has  control  is  cited  bv  Mr.  Clarkson  in  con- 


PROBLEMS   OF   LABOR  305 

uection  willi  the  boot  and  shoe  industry.  Those  who  are  called 
upon  to  pay  from  $8.00  to  $15.00  per  pair  for  shoes  will  read 
with  deep  interest  the  following  extract  from  the  report: 

The  production  of  boots  and  shoes  for  the  first  quarter  of  ioi>j  ua.« 
reported  as  about  60  per  cent  below  the  production  for  the  last  quarter  of 
1918.  Plants  were  partially  closed  and  in  some  cases  it  is  reported  that 
machinery  was  returned  to  the  shoe  machinery  company.  All  in  all,  there 
were  75,000,000  less  pairs  of  shoes  produced  in  the  first  quarter  of  uiio 
than  in  the  last  quarter  of  19 18.  The  census  report  shows  a  reduction  of 
more  than  25  per  cent  in  the  output  of  civilian  men's  shoes  in  the  tiuarter 
ending  with  March  1919,  as  compared  with  production  in  the  quarter  end- 
ing with  December,  19 18,  and  nearly  25  per  cent  reduction  as  compared 
with  the  quarter  ending  September,  1918.  The  reduction  in  output  of 
women's  shoes  amounted  to  approximately  30  and  25  per  cent,  respectively, 
in  comparing  corresponding  periods.  The  reduction  in  the  output  of  shoes 
for   youths,   boys   and   misses   was   even   more   marked. 

Other  examples  of  similar  import  arc  to  be  found  in  the  re- 
port but  perhaps  attention  has  been  drawn  to  a  sufficient  num- 
ber. There  is,  however,  in  the  report,  one  point  of  further  in- 
terest. In  connection  with  the  manufacture  of  cotton  goods 
Mr.  Clarkson  recalls  that  during  the  war  the  watchword  of  the 
industry  was  "output,  and  more  output,"  but  he  says  that  watch- 
word "was  not  heard  after  the  armistice."  He  further  declares 
that  "there  soon  developed  on  the  contrary,  groundless  doubts 
about  the  future  demai\d  and  hints  of  unhealth}'  fears  of  over- 
production." 

If  further  evidence  is  required  it  doubtless  can  be  produced 
in  overwhelming  volume.  Not  in  any  single  case  on  record  has 
proof  been  brought  forward  to  substantiate  the  charge  so  easily 
made  that  Labor  has  been  guilty  of  restriction  of  output. 

Labor  has  been  under  the  necessity  of  fighting  insistently  to 
maintain  the  American  standard  of  living.  It  has  been  under 
the  necessity  of  putting  forth  every  possible  effort  to  keep  in- 
come through  wages  as  near  as  possible  within  reach  of  the 
rapidly  advancing  cost  of  living.  It  has  been  the  victim  of 
profiteerin.c;  and  in  one  sense  a  contributor  to  that  national  dis- 
grace. 

Labor  demands  a  real  relief  from  profiteering.  It  under- 
stands thoroughly  the  necessity  for  production,  being  engaged 
constantly  in  doing  the  useful  and  essential  work  of  the  world, 
in  shaping  and  making  those  things  by  which  human  life  is  made 
possible,  and,  at  times,  pleasant.  It  has  a  profound  under.stand- 
ing  of  the  value  of  commodities.  It  looks  upon  commodities  as 
something  to  be  put  to  useful  purpose.  It  can  have  no  sympathy 
with  any  purpose  of  any  movement  which  has  for  its  object  the 
attaching  of  an  inflated  value  to  the  products  of  toil. 


3o6  SELECTED  ARTICLES 

Labor's  effort  is  and  must  be  an  honest  effort.  There  are 
fundamental  reasons  why  Labor  must  forever  frown  upon  the 
fight  against  all  efforts  to  debase  the  fruit  of  Labor  in  the  chan- 
nels of  finance  and  commerce.  With  every  fibre  of  its  being, 
for  ethical  as  well  as  material  reasons,  it  revolts  against  that 
which  we  have  come  to  know  and  feel  as  profiteering. 

Labor,  with  ample  reason  and  proof,  places  the  blame  for  the 
false  situation  in  which  the  world  finds  itself  squarely  upon 
those  who  are  masters  of  the  productive  machinery  of  the 
world.  It  demands  relief  of  the  most  fundamental  character. 
In  so  far  as  it  can  contribute  thought  and  good  will  and  help- 
ful effort  toward  a  solution  of  the  world's  difficulties,  it  will 
so  contribute  with  eagerness  and  gladness.  But  there  must  be 
relief  and  remedy  at  once.  To  find  that  relief  and  that  remedy 
the  true  situation  must  be  recognized  and  all  false  statements 
and  conclusions  avoided. 

That  Labor  is  a  contributory  factor  to  the  common  distress 
because  of  a  policy  of  restriction  of  output  is  one  of  the  first 
and  most  flagrant  examples  of  falsehood  which  must  be  dis- 
carded. Only  a  frank  recognition  of  facts  will  help  toward  a 
final  constructive  solution  and  nothing  less  than  that  will  satisfy 
a  weary  and  war-worn  world. 


PRODUCTION    THE    GOAL' 

The  urgent  necessity  for  increasing  and  "speeding  up"  the 
output  of  munitions  and  other  essential  materials  during  the 
war,  and  the  prospective  unprecedented  demands  following  the 
period  of  devastation  and  non-production,  have  focused  atten- 
tion, as  never  before,  upon  production — and  its  attendant  prob- 
lems. Probably  never  has  there  been  such  a  large  number  of 
people  from  various  walks  of  life,  so  many  industrial  managers 
and  so  many  workers,  in  seeming  agreement  that  the  aim  or 
principal  problem  of  industry  is  production.  But,  in  spite  of 
this  glib  consensus  of  opinion  on  generalities,  there  has  been 
little  evidence  of  real  thinking  concerning  the  subject. 

While  a  very  worth  while  forward  step  in  industry  has  been 
taken  by  this  quite  sudden  and  general  recognition  of  produc- 
tion as  the  master  aim  of  the  industrial  plant,  yet  it  is  doubtful 

1  By  George  L.  Bell.  Impartial  Chairman,  Men's  and  Boys'  Clothing 
Industry,  New  York  City.  Annals  of  the  American  Academy.  September 
1919. 


PROBLEMS    OF   LABOR  307 

if  the  forward  impetus  can  be  maintained  and  concrete  achieve- 
ment attained  by  this  more  or  less  emotional  recognition  of  a 
general  principle.  The  word  "production"  seems  to  have  widely 
different  meanings  for  many  who  agree  in  using  the  word  to 
describe  the  principal  problem  confronting  industrial  plants. 
There  would  be  more  opportunity  for  real,  constructive  progress 
if  we  could  arrive  at  an  actual,  though  limited  and  partial, 
agreement  on  the  subject. 

As  a  fundamental  basis  of  agreement  industrial  management 
must  squarely  face  and  accept  the  fact  that  the  peoples  of  the 
world  today  are  not  and  will  not  be  interested  in  production  at 
any  or  all  costs,  or  in  production  that  ignores  the  human  fac- 
tors. There  was  a  time,  not  long  past,  when  there  was  not  a 
very  general  appreciation  of  the  "safety  first"  movement,  and 
even  today  there  is  a  discouragingly  large  minority  of  industrial 
managers  who  do  not  feel  it  to  be  their  imperative  duty  to  take 
every  precaution  to  protect  the  workers  from  physical  injuries 
in  their  plants.  But  all  except  the  most  "conscientious  objectors" 
to  change  of  any  kind  must  admit  that  during  the  war  period  a 
new  spirit  or  consciousness  has  developed  among  all  workers, 
and  among  man\'  employers  and  managers,  which  not  only 
makes  impossible  the  evasion  of  responsibility  for  the  physical 
safety  of  employes,  but  which  demands  prompt  and  careful  at- 
tention to  many  more  intangible  and  intricate  phases  of  the 
problems  presented  by  the  human  element  involved  in  produc- 
tion. It  is  not  a  theoretical  situation  which  we  are  facing  in 
this  connection,  but  present  and  pressing  facts,  already  clearly 
apparent  in  most  civilized  countries.  The  forward  looking  in- 
dustrial manager  today  realizes  that  no  longer  can  he  aim  at  in- 
creasing production  and  profits  ad  infinitum  by  methods  arbi- 
trarily devised  by  the  management  alone  and  likewise  arbitrarily 
imposed  on  the  workers.  Whatever  his  individual  opinions 
may  be,  he  is  confronted  with  the  fact  that  workers  in  this  new 
era  are  not  and  will  not  be  interested  in  production  unless  they 
are  given  some  voice  in  the  determination  of  the  processes  of 
the  plant  and  in  controlling  the  conditions  under  which  they 
work — or,  as  it  is  commonly  expressed  today,  "workers  must 
have  more  share  in  the  management."  Labor  and  enlightened 
employers  present  today  a  solid  front  in  demanding  that  the 
workers  must  be  considered  as  integral  human  parts  of  the  plant 
and  that  industry  must  be  so  constitutionalized  that  some  sort 
of  real  industrial  suffrage  or  franchise  is  possible. 


3o8  SELECTED   ARTICLES 

If,  therefore,  we  arc  to  arrive  at  any  real  agreement  between 
management  and  workers  to  cooperate  in  increasing  production 
wc  must  conceive  of  the  master  aim  of  the  plant  as  being  such 
production  as  is  compatible  with  a  real  and  measurable  degree 
of  human  happiness  and  content  in  the  work.  Obviously  this 
aim  must  not  be  so  constructed  as  to  convert  the  plant  into  a 
mere  experimental  laboratory  for  the  testing  of  "labor  theories," 
for  this  would  be  merely  reversing  the  former  prevalent  situa- 
tion where  the  management  imposed  and  tested  its  theories  of 
production  processes  without  giving  much  if  any  consideration 
to  the  effect  upon  the  human  factors.  The  aim  must  be  carried 
out  only  by  careful  and  scientific  consultation  and  practical 
experimentation.  The  entire  personnel  of  the  plant  must  be 
made  articulate  in  some  way  in  order  that  each  person  may  as- 
sume responsibility  for  and  participate  in  the  determination  and 
definition  of  the  production  standards. 

This  modern  concept  of  the  aim  of  industry  extends  beyond 
the  field  of  mere  quantitative  output  and  requires  that  each 
producing  group  render  some  greater  service  to  the  community 
and  the  world  than  the  mere  supplying  of  material  goods.  As  a 
prominent  leader  of  industry  recently  said,  "Service  to  the 
world,  not  profit  to  ourselves,  must  henceforth  be  the  guiding 
thought  of  business  men."  Plant  owners  and  executives,  there- 
fore, must  take  the  initiative  and  determine  first  their  own 
functions  and  place  in  this  new  order.  The  board  of  directors 
of  a  large  western  department  store,  after  an  exhaustive  study 
of  this  particular  question,  recently  passed  a  resolution  includ- 
ing the  following  paragraphs,  which  seem  well  worth  quoting: 

We  emphasize  thai  aspect  of  our  proposed  reorganization  which  may 
be  termed  the  democratization  of  the  establishment.  But  there  is  another 
way  to  approach  the  same  situation.  We  would  look  upon  the  plant  as  a 
great  training  school  in  which  every  employee  from  the  executives  down, 
is  at  the  same  time   a  student  and   a  teacher. 

It  is  just  here  that  we  as  managers  must  find  our  excuse  for  existence. 
If  every  employee  in  this  business  comes  to  us  fully  trained,  fully  equipped 
to  take  his  part  properly  in  the  scheme  of  things,  then  the  employees  are 
running  affairs,  and  we  can  hardly  justify  our  accepting  profit.  We  are 
entitled  to  profit  only  in  the  measure  of  our  contribution  to  the  working  of 
this  business.  Our  task  is  not  to  sweep  floors,  to  wash  v/indows,  to  keep 
books,  to  fill  orders  and  sell  goods  Directly  and  immediately,  that  is  the 
business  of  our  employees.  But  it  is  our  province  to  make  better  sweepers, 
window  washers  bookeepers,  order  fillers  and  salesmen  of  our  employees. 
It  is  not  enough  if  wc  be  bosses  on  the  job,  and  mere  task-masters.  We 
must  constructively  contribute  to  the  symphony,  by  supplying  ideals,  by 
devising  processes,  improving  methods,  inventing  equipment,  and  training 
hand,  heart  and  mind,  if  we  would  earn  that  portion  of  the  income  called 
not   wages,  but  profit. 

But,  it  may  be  said,  we  supply  the  capital  to  run  the  business.  For 
that  we  are  entitled  to  interest,  not  profit.  Or  again,  we  buy  the  goods. 
In  so  far  as  that  is  true,  wc  are  entitled  to  wages,  not  profit.      We  assume 


PROBLEAIS    OF   LABOR  309 

the  risk,  in  bad  years  as  well  as  in  good.  True,  and  for  that  we  are  en- 
titled to  another  kind  of  interest,  not  profit.  Profit,  when  justly  earned, 
is  a  reward  for  a  particular  kind  of  service  which  the  employees  them- 
selves  do   not   contribute. 

"The  employee  no  longer  exists  merely  to  aggrandize  and  extend  the 
personality  of  the  employer,  but  the  latter  exists  solely  to  make  ehectivc 
the   totally   different   function   of   the   employee."      (Harrington   Emerson.) 

Failure  to  realize  this  magnificent  opportunity  we  have  to  make  of  this 
business  a  grand  training  school  of  technique  and  character  carries  its  own 
penalty.  We  have  but  mediocre  help,  and  that  is  expensive.  We  have  a 
rapid  labor  turnover.  When  we  require  a  man  to  fill  an  important  post 
often  we  go  on  the  outside.  Lack  of  a  system  of  training  makes  promo- 
tion a  rare  thing,  and  consequently  deprives  our  people  of  hope  based  upon 
a  laudable  ambition.  Our  service  to  our  customers  cannot  be  the  best. 
Consequently,   our  own  profits  are  not  so   large  as   otherwise  they  might   be. 

The  above  paragraphs  might  be  considered  of  little  practical 
value  if  thej-  were  written  as  part  of  an  academic  treatise  by  a 
theoretical  economist,  but  they  embody  the  conclusions  01  a 
group  of  eminently  successful  business  men  made  after  an  inten- 
sive study  of  their  own  establishment — an  establishment  gener- 
ally admired  bj^  the  public  and  which  the  casual  observer  would 
saj-  w'as  in  no  need  of  reorganization.  Industrial  executives 
must  acquire  something  of  this  spirit  if  they,  or  their  plants, 
are  to  render  effective  service  in  the  new  era  that  is  upon  us. 
Production  must  be  made  to  serve  individual  needs,  not  merely 
the  promotion  of  the  general  wealth.  Production  should  be 
organized  not  merely  upon  the  basis  of  money  or  profits  but 
upon  the  basis  of  real  human  satisfaction.  Stephen  Leacock 
has  well  said,  "The  continued  increase  of  the  sum  total  of  wealth 
as  a  concomitant  of  machine  production  does  not  of  itself  pro- 
mote individual  welfare,  with  which  indeed,  it  has  but  little  con- 
nection." Much  of  the  present  discontent  among  workers  is 
undoubtedly  due  to  the  necessity  for  performing  uncongenial, 
monotonous  machine  work  that  seemingly  follows  a  blind  alley 
and  denies  ambition  opportunity.  The  plant  must  be  so  organ- 
ized as  to  allow  each  individual  in  the  producing  group  to  see 
the  complete  picture  of  the  aims  of  the  plant  and  his  part  in 
the  structure  as  a  whole ;  it  must  afford  opportunity  for  satis- 
fying the  creative  instinct — the  primitive  human  instinct  of  love 
of  work,  which  is  so  apt  to  be  thwarted  by  specialized  machine 
production ;  it  must  provide  the  ladders  of  promotion  which  the 
Vvorker  may  climb  if  he  will. 

Not  all  embracing  formula  can  be  devised  for  carrying  out 
these  aims  of  industry.  There  is  an  unfortunate  tendency  today 
to  install  static  plans  for  the  "sjolution"  of  the  new  industrial 
problems.  In  the  attempt  to  encourage  an  interest  in  produc- 
tion, too  many  managers  are  adopting  forms  and  phrases  Avith 


310  SELECTED  ARTICLES 

little  real  substance.  With  small  appreciation  of  the  full  mean- 
ing and  spirit  of  the  goal  toward  which  the  new  industrial  world 
is  groping,  efforts  are  being  made,  usually  in  good  faith,  to  im- 
pose cut  and  dried  "profit-sharing"  plans,  "industrial  legislative 
councils,"  or  "shop  committees,"  on  unwilling  or  apathetic  em- 
ployes. Industry  is  ever  changing  and  progressing;  therefore 
we  can  have  no  uniform,  static,  nor  rigid,  "solutions"  adaptable 
to  changing  conditions  and  the  progressive  succession  of  prob- 
lems. The  thing  that  is  possible  and  that  is  truly  necessary  is 
the  creation  of  the  human  machinery  or  organization,  based  on 
broad  general  principles  agreed  to  by  all  in  the  plant,  ready  at 
all  times  to  study  and  meet  questions  as  they  arise.  The  name 
and  form  of  the  organization  matter  little  so  long  as  all  in- 
dividuals in  the  plant  are  truly  represented  and  given  a  real 
voice  in  evolving  the  answers  to  new  or  recurring  problems  and 
in  adapting  the  aims  of  the  plant  to  the  developing  ideals  of 
production  and  service. 

There  is,  however,  tlie  danger  of  a  too  sudden  reformation 
and  the  consequent  exercise  of  an  autocratic  paternalism  in 
attempting  to  keep  up  with  the  new  movement.  There  must  be 
no  "crusade"  nor  "campaign"  which  smacks  of  "uplift,"  for 
management  and  employes  today  have  in  common  an  abhorrence 
of  being  "uplifted."  Though,  as  the  result  of  panicky  reaction 
to  industrial  imrcst,  many  may  try  to  build  the  new  structure 
of  industry  on  a  foundation  of  mere  emotional  sentimentality, 
there  must  be  a  firm  economic  basis  if  the  structure  is  to  sur- 
vive. Charity  cannot  be  the  compelling  motive  because  it  is  not 
tlie  aim  to  develop  the  industrial  plant  into  an  eleemosynary  in- 
stitution. Moreover,  the  workers  who  are  seriously  and  sin- 
cerely pressing  for  a  larger  and  broader  participation  in  in- 
dustry are  not  asking,  and  do  not  want,  to  be  given  things  to 
which  they  are  not  entitled  as  a  matter  of  economic  and  ethical 
right.  If  owners  and  managers  alone  determine  and  define  the 
production  that  they  think  will  best  contribute  to  the  happiness 
of  the  individuals  involved,  and  if,  with  the  generous  gesture 
of  industrial  overlords,  they  give  more  freedom  and  opportunity 
to  workers,  the  real  and  higher  aims  of  industry  will  be  de- 
graded. 

In  the  development  of  the  economic  basis  for  the  new  struc- 
ture there  should  be  collective  or  group  action,  for  only  thus 
can  the  idea  of  collective  responsibility  be  engendered.  Scat- 
tered,  imcoordinated   individual   action   should   be  avoided,   for 


PROBLEMS   OF  LABOR  311 

interest  in  group  production  means  tliat  the  plant  becomes  a  real 
entity  and  power  for  service  to  humanity.  The  management 
and  the  workers  must  study  and  try  to  understand  each  other's 
peculiar  and  distinct  problems,  and  they  must  work  cooperatively 
in  solving  these  problems.  It  is  submitted  that  profit-sharing 
schemes  would  meet  with  greater  success  if  the  workers  were 
taken  into  real  partnership  on  problems  as  well  as  profits.  Effi- 
cient management  is,  of  course,  the  exclusive  duty  of  the  plant 
executives,  but  the  workers  would  be  more  convinced  of  the 
sincerity  and  motives  of  the  management,  and  more  stimulated 
to  productive  effort,  if  the  difficulties  confronting  plant  execu- 
tives were  explained  as  fully  as  possible  to  all  in  the  plant,  and 
if  the  processes  of  reasoning  and  deduction  upon  which  orders 
and  plans  are  based  were  likewise  made  clear. 

There  is  no  doubt  that  each  worker  owes  a  fair  day's  return 
in  labor  for  his  wages,  but  before  the  employer  can  demand 
this  return  he  must  have  fulfilled  an  obligation  which  is  abso- 
lutely a  condition  precedent — the  providing  of  efficient  manage- 
ment. And  in  the  new  industrial  order  an  ever  higher  and 
higher  degree  of  efficiency  will  be  required  of  management.  Be- 
fore we  can  talk  of  enlisting  more  general  interest  in  increased 
production  or  of  developing  the  higher  conception  of  the  func- 
tions of  industry  that  seems  to  be  struggling  for  expression, 
there  must  be  a  much  more  comprehensive,  thorough  and  de- 
tailed study  of  the  processes  and  costs  of  production.  Manage- 
ment cannot  spur  the  workers  to  greater  activity  by  merely 
shouting  "More!  More!";  it  must  present  definite  standards 
of  accomplishment  for  consideration  by  the  workers  and  the 
proposals  must  be  backed,  not  by  the  forceful  language  of  a  task 
master,  but  by  convincing  and  accurate  data  obtained  by  ex- 
haustive general  research  as  well  as  intensive  study  of  the  plant 
operations.  It  is  primarily  the  duty  of  the  management  to  bring 
such  information  to  the  council  table,  and  only  with  such  in- 
formation at  hand  can  "every  employe,  from  the  executives 
down,  be  a  student  and  a  teacher"  in  the  great  permanent  train- 
ing schools  which  are  to  chart  the  paths  of  real  service  to  hu- 
manity which  industry  is  destined  to  follow. 

Another  development  in  the  evolution  of  industry  which  is 
just  becoming  apparent  is  the  breaking  away  from  the  habits 
of  secretiveness,  isolation  and  hostility  between  individual  plants 
in  connection  with  even  non-competitive  matters.  It  is  now 
realized   that    competing   as   well    as    non-competing   establish- 


3IJ  SELECTED   ARTICLES 

meats  have  many  problems  iu  common — and  certainly,  at  least, 
the  labor  problem — in  the  handling  of  which  they  must  cooper- 
ate. Standardization  and  constitutionalization  of  industries  en- 
gaged in  the  same  line  of  production  on  a  national,  if  not  an 
international,  basis  of  research  and  determination  of  policies 
must  assuredly  come,  and  the  spirit  of  provincialism  must  be 
discarded  if  we  are  to  make  worth  while  progress.  To  take 
part  actively  in  such  broader  developments  must  be  one  of  the 
conscious  policies  of  every  plant. 

As  a  summary  statement,  it  might  be  said  that  the  keystone 
oi  the  arch  of  the  new  industrial  structure  is  to  be  found  in 
the  full  publication  of  facts.  Industrial  relations  should  not  be 
made  into  an  involved  "problem"'  through  complicated  and  un- 
natural forms  of  plant  organization.  There  should  be  estab- 
lished the  simple  principle  that  all  the  workers  in  the  plant 
should  be  given  an  opportunity  to  contribute  to  the  detailed 
study  of  all  the  facts  bearing  on  finance,  and  on  processes  and 
costs  of  production,  and  all  such  facts  should  be  open  to  full 
examination  and  discussion.  If  all  the  facts  are  not  so  exposed, 
then  there  is  the  suspicion  of  an  unworthy  motive  in  concealing 
something.  Concealment  is  certainly  not  in  keeping  with  the 
modern  and  rightful  aim  of  the  plant.  With  all  the  data  before 
the  management  of  the  workers,  there  is  an  opportunity  for 
openly  arri\ing  at  an  agreement  on  the  principles  and  the 
rwethods  of  dividing  the  income  of  the  plant — then  there  is  some 
possibility  of  establishing  the  often  repeated  assertion  that 
"the  interests  of  employers  and  labor  are  really  identical,"  be- 
cause there  will  be  some  common  gain  to  both  in  increased 
production.  Arbitrary  power  on  either  side,  whether  in  connec- 
tioti  with  industrial  relations  or  any  other  human  relations,  is 
dangerous  and  unsound ;  there  must  be  concessions  of  power  by 
common  consent  which  will  result  in  common  advantages. 


INDUSTRIAL  INSURANCE 

1 X  DU  ST  R I A  L  ]  X  S  U  R  A  X  C  E  ^ 

Mcilical  Examination   of  Employees  and  Prevention  of 
Sickness  its  Proper  foiindafioii 

Industrial  sickness  insurance  constitutes  a  logical  means  by 
winch  societ\-  may  equitably  distribute  the  costs  resulting  from 
physical  inefficiency.  No  sound  argument  can  be  advanced 
against  the  propriety  of  establishing  systems  of  industrial  sick- 
ness, insurance  nor  against  the  economic  necessity  for  such 
systems. 

It  is  not  the  purpose  of  this  paper  to  discuss  the  fiscal  aspects 
of  the  question.  It  is  enough  to  state,  briefly,  that  since  the 
State,  the  employer,  and  the  employee  are  the  beneficiaries, 
social  justice  demands  that  the  costs  of  industrial  insurance  be 
borne  by  all  three  on  a  basis  of  equitable  representation. 

It  is  obvious,  however,  no  matter  in  what  way  the  burden 
of  the  cost  is  divided,  that  the  best  scheme  of  industrial  insur- 
ance is  the  one  in  which  an  adequate  reserve  is  maintained  at  a 
minimum  cost. 

It  is  in  this  respect  that  the  majority,  if  not  all  the  systems 
now  in  force,  are  defective,  in  that  they  contemplate  providing 
for  the  cost  of  sickness  or  physical  disability  only  after  these 
have  become  facts.  The  employee  enjoys  the  benefits  of  sick- 
ness insurance  onlj-  after  the  disease  or  disability  has  lasted 
some  time.  In  other  words,  existing  systems  of  industrial  in- 
surance fail  to  recognize  adequately  that  great  principle  at  the 
root  of  all  present-day  campaigns  in  the  interest  of  public 
health,  namely,  that  of  prevention.  Too  great  attention  has  been 
paid  to  providing  the  sick  employee  with  medical  attention  after 
he  becomes  entitled  to  it  by  reason  of  illness,  too  little  to  pre- 
venting the  illness  which  entitled  him  to  the  benefit  of  the  in- 
surance.    The  basic  principle  of  industrial  insurance,  therefore, 

1  By  J.  W.  Schereschewsky.  Public  Health  Reports,  vol.  29,  No.  23, 
June    5,    1914- 


314  SELECTED   ARTICLES 

should  be  to  prevent  illness,  rather  than  to  pay  the  costs  of  pre- 
ventable diseases  and  disabilities. 

One  of  the  chief  objections  urged  against  compulsory  in- 
dustrial sickness  insurance  has  been  its  cost.  Such  insurance 
must,  indeed,  be  costly  so  long  as  the  principle  of  prevention 
is  not  taken  into  account.  As  soon,  however,  as  our  systems  of 
industrial  insurance  are  placed  upon  a  preventive  basis,  we  may 
confidently  look  for  a  great  reduction  in  the  cost,  with  the  re- 
sult of  a  widespread  adoption  of  such  systems,  greatly  to  the 
l)enefit  of  society  at  large. 

Granted,  then,  that  systems  for  industrial  sickness  insurance, 
in  common  with  other  public-health  work,  should  rest  upon  a 
preventive  basis,  the  primary  object  of  such  insurance  would 
be  to  detect  incipient  defects  and  diseases  among  workers,  or 
to  prevent  the  development  of  diseased  conditions  by  proper 
precautionary  measures.  It  is  evident  that  this  object  will  be 
most  readily  attained  by  means  of  the  frequent  periodic  physical 
cx;imination  of  employees  and  an  inspection  of  their  environ- 
ment. In  no  other  way  can  the  first  beginnings  of  disease  be  so 
readily  detected,  or  the  adverse  influence  of  unhygienic  condi- 
tions averted.  It  is  to  he  understood,  of  course,  that  we  are  not 
to  rest  content  with  the  mere  detection  of  such  incipient  defects 
and  diseases,  or  of  unhygienic  conditions  among  workers,  but 
their  discovery  should  go  hand  in  hand  with  an  earnest  effort 
to  discover  the  adverse  factors  at  the  root  of  the  matter.  The 
inquiry,  therefore,  is  not  to  be  terminated  until  the  offending 
condition  has  been  removed  and  progress  has  been  made  toward 
renewed  health  and  efficiency. 

It  becomes  evident  in  the  course  of  such  inquiries  that  not 
only  must  liad  shop  conditions  be  taken  into  account  but  the 
conditions  of  the  worker's  total  environment  be  subject  to 
scrutiny.  In  many  instances  the  origin  of  the  defective  state 
may  be  the  unhygienic  home  rather  than  the  unhygienic  work- 
shop. 

This  means,  in  the  medical  organization  of  the  industrial  in- 
surance of  the  future,  that  preventive  work  will  greatly  expand 
the  horizon  of  our  existing  activities. 

We  are  already  beginning  correctly  to  evaluate  the  import- 
ance of  periodic  physical  examinations  in  maintaining  a  con- 
tinuous state  of  physical  efficiency.  Whenever  these  have  been 
carried  into  effect,  they  have  resulted  in  the  detection  of  numer- 


PROBLEMS    OF   LABOR  315 

OU5  defects,  or  diseases,  in  their  incipiency,  and  made  it  possible 
to  apply  suitable  remedies  before  irretrievable  damage  has  been 
done. 

What  is  needed,  however,  for  the  sanitation  of  industries  and 
the  reduction  to  a  minimum  of  the  enormous  annual  loss  to 
workers  through  preventable  illness  and  disabilities  is  a  rapid 
extension  of  such  periodic  physical  examinations  and  an  exten- 
sion of  the  prophylactic  work  beyond  the  confines  of  the  shop. 

As  an  adjuvant,  therefore,  to  the  data  obtained  by  the  phys- 
ical examination,  the  sanitary  history  of  the  employee,  in  order 
to  be  complete,  will  require  the  enlistment  of  the  services  of  the 
social  worker,  or  the  visiting  nurse,  so  that  his  entire  surround- 
ings and  their  effect  in  producing  diseased  states  can  be  taken 
properly  into  account. 

It  is  needless  to  say  that  industrial  insurance,  operated  upon 
this  preventive  principle,  should  result  in  benefits  of  a  far-reach- 
ing character.  In  the  first  place,  it  is  the  method,  par  excellence, 
by  which  the  effect  of  industries  upon  individual  efficiency  can 
be  properly  studied.  Under  such  a  system  we  should  not  be 
long  in  getting  at  the  basic  facts  underlying  ill  health  in  so 
many  industries,  and  in  working  out  appropriate  preventive  mea- 
sures. 

Moreover,  an  industrial  insurance  system,  based  upon  the 
preventive  work  resulting  from  periodic  physical  examinations, 
should  effect,  to  a  notable  degree,  the  establishment  of  hygienic 
standards  of  living  throughout  the  country.  The  reduction  in 
the  loss  of  working  days  per  employee  from  illness  throughout 
the  year  should  be  notable.  In  this  way  great  economic  gains 
with  diminished  cost  of  production  would  result. 

Another  notable  result  would  be  the  formulation  of  minimum 
hygiene  standards  for  various  industries,  and  the  promulgation 
of  uniform  industrial  legislation  for  their  enforcement  through- 
out the  country. 

Still  another  good  effect  of  industrial  insurance  based  upon 
preventive  methods  would  be  an  increase  in  the  efficiency  of 
local  health  authorities.  It  is  plain  that  the  periodic  physical  ex- 
aminations contemplated,  taking  into  account,  as  they  do  home 
as  well  as  factory  conditions,  must  reveal  many  insanitary  con- 
ditions which  must,  necessarily,  be  brought  to  the  attention  of 
the  local  health  authorities  for  correction,  when,  otherwise  they 
might  not  have  been  detected.    In  this  way  the  value  of  the  ser- 


^,i6  SELECTED   ARTICLES 

vices  of   local   health   authorities   to  the   respective   communities 
will  be  enhanced. 

Finally,  the  cost  of  industrial  insurance,  based  on  preventive 
lines,  should  be  far  below  that  of  a  system  providing  benefits 
only  after  the  worker  has  become  ill.  The  reserve  necessary  to 
any  system  of  industrial  insurance  is,  of  course,  dependent  upon 
the  average  frequency  of  illness.  If,  by  preventive  measures, 
we  succeed  in  reducing  this  frequency,  it  follows  that  the  re- 
serve, and  consequently  the  cost  of  the  insurance,  may  be  re- 
duced, after  proper  provision  has  been  made  for  the  cost  of  the 
])reventive  work.  We  are,  therefore,  justified  in  coming  to  the 
following  conclusions : 

1.  Industrial  sickness  insurance  is  an  economic  necessity  in 
modern  social  evolution. 

2.  The  basis  upon  which  industrial  insurance  should  rest  is 
the  prevention  of  illness  and  physical  disabilities. 

3.  Frequent  periodic  physical  examinations  of  workers  con- 
stitute the  logical  means  by  which  defects  and  diseases  can  be 
detected  in  their  incipiency. 

4.  Tlie  scoi)e  of  such  examinations  should  l)c  extended  to 
iiichuL'   home   as   well   r>s    factory  conditions. 

5.  Industrial  insurance  based  upon  preventive  measures 
should  redound  greatly  to  the  benefit  of  society. 

(a)     by   reducing  the   annual   loss   of  time  through   illness; 
(h)     by  establishing  hygienic  standards; 

(c)  by  establishing  minimum  hygienic  standards  for  in- 
dustries; 

(d)  ])y  favoring  the  enactment  of  uniform  industrial  legis- 
lation ; 

(e)  by  increasing  the  efficiency  of  local  health  authorities. 

6.  The  cost  of  carrying  industrial  insurance  based  on  pre- 
ventive principles  should  be  less  than  that  of  present  systems 


HEAI/ni   iXSUR.^NCE' 

W'lienever  a  number  of  people  are  subjected  to  a  common 
risk  wliirh  may  entail  loss  upon  them,  the  insurance  principle 
may  be  applied   if  the   risk  is  measurable.     Since  most  of  the 

'  Address  by  John  A.  Lapp,  Managing  Editor  of  Modern  Medicine, 
before  the  industri.il  section  of  the  National  Conference  of  .Social  Work, 
held  at  Atlantic  City  in  June,    1919. 


PROBLEMS    OF   LABOR  31? 

risks  which  people  run  liave  been  found  by  experience  to  be 
measurable,  insurance  has  come  to  be  applied  in  many  different 
fields.  Insurance  is  merely  a  distributor  of  loss.  It  is  based 
upon  fairly  exact  calculations.  Fire  insurance  measures  the 
loss  from  fires  and  fixes  the  premium  which  each  dollar's  worth 
of  property  should  be  taxed  as  a  premium  to  cover  possible 
loss.  Marine  insurance  measures  the  loss  from  shipping  dis- 
asters and  fixes  the  premiums  that  are  necessary.  Life  in- 
surance measures  the  number  of  deaths  that  are  going  to  occur 
in  each  age  group  and  fixes  the  premiums  to  cover  the  loss. 
Numerous  other  forms  of  insurance  have  been  devised,  includ- 
ing insurance  against  hail,  tornadoes,  accidents,  burglary,  plate 
glass  breakage,  fidelity,  and  others.  Insurance  is  well  established 
as  a  business  propostion.  Verj^  few  business  men  fail  to  protect 
themselves  against  serious  loss  of  property.  When  insurance 
is  conceived  of  as  a  universal  matter  applying  to  all  people  and 
all  losses  of  a  certain  kind,  it  is  even  simpler  of  application 
and  more  businesslike  than  the  voluntary  forms  of  property  in- 
surance with  which  w-e  are  more  familiar. 

We  are  coming  to  recognize  the  fact  that  when  the  people 
of  an  entire  State  are  subjected  to  certain  risks  which  are  mea- 
surable, it  is  good  business  to  organize  to  certain  risks  which  are 
instrumentality  of  the  State,  measure  the  risk,  and  pay  the  losses 
\vhich  happen  at  random  to  this  individual  or  that.  We  have 
used  this  principle  for  many  years  without  recognizing  it  as 
social  insurance.  Nearly  every  State  provides  a  fund  by  the 
taxation  of  dogs  from  which  the  losses  to  sheep  owners  are 
paid.  \Yc  have  established  the  principle  in  insurance  of  bank 
deposits  now  in  force  in  a  number  of  States  whereby  a  fund  is 
collected  from  the  banks  in  order  to  pay  the  losses  to  depositors 
through  bank  failures.  Still  later,  we  have  applied  in  some 
States  the  same  principle  by  the  collection  of  funds  from  a  tax 
on  agricultural  lands  to  pay  the  losses  from  hail.  North  Dakota 
and  South  Dakota  have  done  this  on  a  State-wide  basis,  as  have 
also  some  of  the  Canadian  Northwest  Provinces. 

Lastlj',  we  have  recognized  that  State-wide  insurance  of 
laborers  against  accident  is  a  simple,  practicable,  and  certain 
way  of  distributing  the  economic  shock  of  accident.  In  a  few 
States  this  principle  is  applied  through  the  creation  of  a  single 
State  fund  from  which  the  unfortunate  victims  of  accidents 
draw  a  part  of  their  compensation  and  are  provided  with  med- 
ical and  surgical  care. 


3i8  SELECTED   ARTICLES 

Two  Problems  of  Health  Insurance  Stated 
These  simple  statements  of  the  application  of  the  insurance 
principle  voluntarily  and  also  on  a  social  basis  arc  made  here 
for  the  purpose  of  clarifying  our  thinking  at  the  outset  on  the 
subject  of  health  insurance.  They  are  too  often  overlooked. 
Some  folks  would  make  us  believe  that  the  proposal  for  social 
health  insurance  is  some  new,  absurd  proposition  which  has  been 
evolved  in  fantastic  minds,  when,  as  a  matter  of  fact,  its  com- 
ing is  nothing  but  the  evolution  of  sound  social  and  business 
sense.  Health  insurance  proposes  to  collect  a  fund  from  which 
the  losses  of  sickness  can  be  partly  paid  and  medical  treatment 
provided  on  a  universal  scale.  The  only  problems  involved  are 
the  measurability  of  sickness  and  the  organization  of  the 
scheme. 

We  have  plenty  of  evidence  from  every  quarter  to  show  that 
sickness  is  measurable.  We  know  with  fair  certainty  how  much 
severe  sickness  will  occur  in  a  large  group  of  people  every  year. 
We  know  what  that  loss  entails  in  the  way  of  lost  wages,  and 
we  can  readily  measure  what  the  necessary  medical  care  will 
cost.  In  fact,  we  know  far  more  in  these  respects  about  sick- 
ness insurance  than  we  knew  about  accident  insurance  when 
workmen's  compensation  laws  were  put  in  force,  and  we  know 
infinitely  more  than  the  people  who  started  fire,  life,  marine, 
casualty,  fidelity,  and  burglary  insurance  ever  knew  about  the 
losses  from  these  causes  before  they  successfully  established  in- 
surance. 

In  fact,  we  have  a  verj'  good  measure  of  the  amount  of  sick- 
ness which  occurs  in  any  normal  group  of  working  people.  All 
the  evidence,  which  appears  to  be  overwhelming,  shows  that 
each  worker  suffers  about  nine  days'  sickness  every  year,  and 
that  23^  to  3  per  cent  of  the  people  are  sick  at  all  times.  The 
findings  of  the  health  insurance  commissions  of  Illinois,  Ohio, 
Pennsylvania,  and  Connecticut,  from  a  study  of  131,000  cases 
of  disability,  showed  that  20  per  cent  of  the  workers  suffer  a 
disabling  sickness  every  year,  lasting  for  more  than  seven  days. 
These  figures  show  that  the  cases  of  sickness  lasting  more  than 
seven  days  averaged  about  35  to  2,7  days  each.  These  figures 
are  borne  out  by  innumerable  investigations,  and  particularly 
by  an  unpublished  study  of  the  Workmen's  Sick  and  Death 
Benefit  Fund  of  America,  New  York  City,  made  by  the  United 
States  Bureau  of  Labor  Statistics,  and  by  studies  of  the  Federal 


PROBLEMS   OF   LABOR  319 

Industrial  Relations  Commission  and  of  the  Unittd  Stat«s  Pub- 
lic Health  Service. 

Not  only  do  we  know  how  much  sickness  occurs  in  the 
group  but  we  know  with  fair  exactness  how  this  sickness  falls 
on  the  different  people  in  the  group.  It  appears  that  20  per  cent 
of  a  normal  group  will  suffer  a  disabling  sickness  lasting  more 
than  a  week;  that  about  65  per  cent  of  those  that  are  sick  will 
be  disabled  for  less  than  30  daj's;  that  nearly  20  per  cent  will 
be  sick  for  four  to  eight  weeks;  that  6  per  cent  will  be  sick 
from  eight  to  twelve  weeks;  that  3  per  cent  will  be  sick  for 
more  than  6  months;  and  1.3  per  cent  for  more  than  a  year. 

We  know  further  that  sickness  varies  with  age  and  that  it 
falls  more  heavily  as  men  grow  older.  The  exact  figures  as 
shown  by  the  Workmen's  Sick  and  Death  Benefit  Fund  of 
America  are  as  follows : 

CASES  OF  SICKNESS  LASTING  MORE  THAN  SEVEN  DAYS 

Average  Length  of  time 

Age.  compensated     (days)   each 

days.  case  lasts. 

£0  years   3.0  22.9 

25  years   3.1  29.4 

30    years    3-7  32.6 

35    years    4.8  39-6 

40  years   4.3  35.0 

45    years    45  35-i 

50  years   5.6  39.1 

55    years    7-i  44-o 

60  years  8.6  49.5 

65    years    9.1  49.4 

70  years    15.1  65.9 

Total  S.I  38.9 

We  know,  too,  that  sickness  varies  according  to  occupation, 
in  some  occupations  rising  to  two  and  three  times  the  rate  of 
other  occupations.  We  know  also  that  there  are  some  variations 
according  to  sex.  These  facts  we  know  with  fair  exactness. 
They  are  not  disputed  by  anj'  intelligent  and  honest  person. 

We  have,  then,  here  the  proper  basis  for  the  establishment 
of  an  insurance  system.  We  know  pretty  nearly  how  much  sick- 
ness there  is  going  to  be  among  a  million  people.  We  know 
very  nearly  what  the  sickness  will  cost.  All  we  need  to  do  is 
to  apply  the  same  principles  which  we  have  already  applied  in 
other  respects  and  provide  for  the  distribution  of  the  burden  of 
sickness  on  a  communal  basis.  It  is  not  a  leap  in  the  dark.  It 
is  not  a  blind  attempt  to  do  the  impossible.  It  is  simply  the  ap- 
plication of  well-known  and  well-established  business  principles 
to  the  solution  of  the  problem  which  hangs  as  a  cloud  over  the 


320  SELECTED   ARTICLES 

lives  of  llie  people.  \Vc  know  how  much  sickness  there  will  be 
in  a  group,  but  we  do  not  know  upon  which  individuals  the  cost 
of  sickness  will  fall. 

Economic  and  Social  Results  of  Sickness 

What  arc  the  plain  results  of  sickness?  It  hardly  seems 
necessary  to  repeat  them,  and  yet  there  are  those  who  would 
deny  even  the  simplest  truths  when  those  truths  are  incon- 
venient to  them. 

Sickness  drives  people  from  a  higher  to  a  lower  standard  of 
life.  It  drives  people  from  independence  to  dependence.  It 
keeps  thousands  on  the  brink  of  poverty  and  it  keeps  millions 
in  the  fear  thereof.  When  the  wage  earner  is  taken  sick,  his 
wages  stop.  Rarely  are  w-agcs  paid  beyond  the  hour  when  the 
man  quits  work.  But  his  expenses  do  not  stop— they  go  on  and 
increase.  To  them  are  added  the  cost  of  medical  care,  if  the 
man  docs  not  immediately  seek  charitable  aid.  Slender  re- 
sources are  soon  used  up.  Everyone  who  appears  to  have  the 
slightest  presumption  of  knowledge  is  very  well  aware  that  the 
rank  and  file  of  w  orking  men  are  onl>»  a  brief  space  away  from 
economic  distress.  Perhaps  the  man  has  some  personal  credit 
or  some  helpful  friends,  but  even  the  benefits  of  these  are  soon 
used  up  if  the  man  happens  to  be  one  of  the  million  and  a  half 
who  are  sick  for  four  to  eight  weeks,  or  of  the  230,000  who  are 
sick  for  more  than  six  months. 

The  next  resort  is  the  chattel  loan.  Here  we  find  that  35  to 
50  per  cent  of  loans  are  due  to  sickness.  The  next  resort  is  the 
associated  charities.  Here  again  we  find  that  35  to  50  per  cent 
of  applications  are  due  to  sickness.  The  last  resort  is  outdoor 
public  relief,  of  which  we  have  very  little  satisfactory  statistical 
evidence.  We  found  in  Ohio,  however,  that  30  per  cent  of  the 
people  in  county  infirmaries  had  been  reduced  from  independ- 
ence by  sickness,  resulting  in  their  going  to  the  poorhouse  and 
tliat  40  per  cent  of  the  old  people  in  private  "homes"  were  be- 
cause of  the  calamity  of  sickness  at  some  time  in  their  lives. 

Health  insurance  merely  attempts  to  stop  this  steady  decline 
from  a  higher  to  a  lower  status.  It  is  intended  to  insure  people 
who  are  now  independent  and  to  keep  them  from  going  the 
downward  path  toward  the  brink  of  poverty.  It  is  intended  to 
stabilize  society  above  the  poverty  line  so  that  from  this  one 
cause  fewer  people  shall  descend  in  the  scale  of  life.     No  one 


PROBLEMS    OF   LABOR  321 

can  study  the  figures  on  this  subject  and  reflect  upon  the  facts 
disclosed  without  being  convinced  of  the  necessity  of  something 
to  prevent  the  decline  in  human  values  and  no  one  can  under- 
stand insurance  principles  without  being  convinced  that  the  solu- 
tion of  the  problem  rests  in  social  insurance. 

Compulsory  v.  Voluntary  Health  Insurance 

The  question  is  raised  at  this  point :  "Why  make  it  compul- 
sory; why  organize  it  on  a  universal  scale?"  "Why  not  leave 
it  to  voluntary  action?"  The  answer  is  simple.  If  it  is  left  to 
voluntary  efforts  it  will  cost  far  more  than  it  would  as  a  social 
enterprise.  The  cost  would  in  fact  be  more  than  doubled.  We 
have  the  example  before  us  of  the  burial  insurance  companies 
which  have  been  insuring  people  against  a  pauper  burial  on  a 
voluntary  scale.  The}-  probably'  manage  their  business  well — 
no  one  has  lateh-  charged  them  wdth  a  lack  of  efficiency.  Dur- 
ing the  last  three  A-ears  they  have  collected  $448,000,000,  and 
have  paid  in  death  claims,  $148,000,000,  or  about  2)3  per  cent  of 
the  amount  collected.  The  people  have  paid  for  the  privilege  of 
voluntary  burial  insurance  in  the  last  three  years  the  sum  of 
$300,000,000  over  and  above  what  thej'  were  paid  for  burials. 
The  casualt}-  insurance  companies  on  a  voluntary  basis  have 
collected  in  the  last  twenty  years  $402,000,000  and  have  paid  in 
losses  $175,000,000.  Nearly  56  per  cent  of  this  enormous  sum 
goes  for  the  privilege  of  regaling  ourselves  with  voluntary  in- 
surance. 

Workmen's  compensation  insurance  companies  in  the  last 
five  years  have  received  $125,000,000  and  have  paid  $55,000,000. 
Alutual  workmen's  compensation  funds  have  received  $17,000,000 
and  have  paid  $7,000,000.  Commercial  health  insurance  compa- 
nies in  fifteen  years  have  received  $74,000,000  and  have  paid 
$33,000,000. 

These  huge  sums  of  money  have  been  sacrificed  to  the  prin- 
ciple of  voluntary  insurance.  Set  over  against  them  is  the  rec- 
ord of  the  Ohio  Workmen's  Compensation  Insurance  Fund, 
operated  on  a  State-wide  compulsory  basis,  which  shows  a 
charge  of  3]/^  to  5  per  cent  for  the  conduct  of  the  business.  A 
pencil  and  a  piece  of  paper  will  very  quickly  tell  you  what  we 
have  paid  for  the  privilege  of  having  voluntary  insurance.  Uni- 
versal social  insurance  removes  the  cost  of  solicitation,  removes 
the  profits  of  insurance  carriers,  removes  the  absurdly  high 
salaries    of   insurance    officials,    and    in    many    ways    makes    the 


322  SELECTED  ARTICLES 

money  of  the  insured  go  further  in  providing  him  the  benefits 
wliich  he  needs  in  a  time  of  calamity. 

The  extent  to  which  voluntary  health  insurance  is  now  pur- 
chased is  the  best  evidence  of  its  probable  failure  to  meet  the 
need  for  universal  insurance.  Only  about  ^;i  per  cent  of  the 
workers  carry  any  health  insurance.  Such  insurance  as  is  car- 
ried amounts  to  $5  to  $7  a  week  for  about  thirteen  weeks  and 
practically  no  medical  service.  In  the  United  States  only  about 
3  per  cent  to  5  per  cent  of  losses  is  distributed  by  health  in- 
surance. There  is  no  evidence  that  outside  of  the  larger  estab- 
lishment funds,  medical  and  cash  benefits  can  ever  be  so  com- 
bined and  organized  as  to  he  effective. 

The  Cost  of  Health  Insurance 

The  facts  of  the  case  Irom  beginning  to  end,  with  scarcely 
a  single  exception,  point  to  the  desirability  of  establishing  a 
State-wide  human  depreciation  fund  by  the  collection  of  pre- 
miums from  those  who  are  responsible  for  sickness  and  for  its 
care.  We  know  now  who  those  parties  are.  It  is  perfectly 
clear  that  industry  is  responsible  for  some  diseases,  the  indi- 
vidual is  responsible  for  some,  and  the  community  is  responsible 
for  some.  It  is  equally  clear  that  two  or  more  of  these  factors 
combine  in  certain  other  cases  to  cause  sickness.  It  is  perfectly 
clear  that  the  line  can  not  be  drawn  where  industrial  responsibil- 
ity stops  and  individual  responsibility  begins,  or  where  the  com- 
munity responsibility  begins  or  ends.  Tuberculosis,  for  example, 
is  caused  by  a  combination  of  two  or  more  of  these  factors.  A 
study  in  Cincinnati  by  the  United  States  Public  Health  Service 
indicated  that  in  4.4J2  cases,  18  per  cent  were  due  to  industry;  ;i2 
per  cent  to  heredity;  10.8  per  cent  to  intemperance  and  vice; 
9.7  per  cent  to  housing;  and  the  rest  from  undefined  causes. 
This  is  merely  illustrative  of  the  interrelation  of  causes  of  sick- 
ness. No  one  can  honestly  say  or  believe  that  industry  and  the 
community  should  not  share  with  the  individual  the  cost  of  sick- 
ness. We  have  heretofore  put  the  principal  burden — in  fact, 
practically  all  of  it — on  the  individual.  It  is  time  that  our  social 
conscience  be  awakened  from  its  slumber  and  having  taken 
cognizance  of  the  awful  consequence  of  diseases,  that  we  shall 
join  in  a  large  cooperative  undertaking  for  the  creation  of  a 
fund  through  the  payment  collected  from  causative  factors,  so 
that  the  burden  of  sickness  shall  tiot  fall  as  it  now  falls — upon 
tlie  individuals  who  happen  to  be  sick  and  at  a  time  when  they 
are  least  able  to  bear  the  extra  burden. 


PROBLEMS    OF   LABOR  323 

It  seems  almost  incredible  that  anyone  would  here  raise  the 
question  of  cost.  It  seems  absurd  to  mention  it  in  this  paper. 
There  are  thousands,  however,  who  make  the  absurd  claim  that 
health  insurance  will  be  so  costly  as  to  overwhelm  us.  Figures 
are  cited  to  make  this  loss  appear  even  more  excessive  than  it 
is.  How  childlike  the  simplicity  of  such  people.  If  sickness  is 
costing  $2,000,000,000  to-day,  somebody  is  bearing  it,  and  who  is 
that  somebody?  If  the  burden  is  too  great  for  the  whole  society 
to  bear,  it  is  a  pretty  fair  evidence  that  it  is  altogether  crushing 
for  the  few  who  must  now  bear  it.  If  it  be  true  that  health 
insurance  would  cost  too  much,  then  the  social  order  is  bank- 
rupt. It  is  even  worse  than  bankrupt  because  it  compels  the 
v/eakest  portion  of  society  at  the  time  they  are  weakest  to  bear 
the  impossible  burden  which  it  is  claimed  can  not  be  borne  with- 
out serious  disaster  by  society  as  a  whole.  Such  arguments  re- 
duce to  absurdity.  Health  insurance  means  the  redistribution  of 
a  burden  which  now  falls  unevenly.  It  does  not  cost  money, 
it  distributes  cost  already  in  existence,  and  it  does  it  without 
doing  harm,  as  has  been  shown  in  all  countries,  even  our  own, 
wherein  we  distribute  certain  burdens  by  means  of  social  in- 
surance. The  load  of  sickness  is  comparatively  easy  to  carry 
when  it  is  distributed  over  the  whole  body.  The  soldier  who 
would  attempt  to  carry  his  burden  attached  to  his  feet  would 
not  get  very  far;  even  if  he  carried  his  burden  in  his  two  hands 
he  would  soon  tire  out.  Distributed  scientifically  over  his  entire 
body,  he  carries  it  with  comparative  ease.  We  are  carrying 
our  sickness  burdens  around  our  feet.  It  is  time  that  we  dis- 
tribute them  scientifically  over  the  entire  body. 

Opposition  to  Health  Insurance 

The  opposition  to  health  insurance  has  made  strange  bed- 
fellows. The  lions  and  the  lambs  are  lying  down  together,  but 
if  I  mistake  not,  the  lambs  will  have  to  be  renewed  occasionally. 
The  principal  opposition  comes  from  burial  insurance  compa- 
nies and  from  casualty  insurance  companies.  It  needs  no  par- 
ticular acumen  to  understand  why.  The  fat  sum  of  $100,000,000 
in  expenses  and  profits  annually  on  the  part  of  burial  insurance 
companies  alone  well  accounts  for  their  opposition.  The  sum 
of  $40,000,000  of  profits  and  cost  of  administration  in  the  case 
of  casualty  companies  might  well  be  taken  as  an  indication  of 
the  reason  for  their  opposition.  These  organizations  with 
money     to     spend,     mostly    the     money     of     the     policyholders. 


324  SELECTED  ARTICLES 

liave  attempted  to  poison  the  minds  of  other  organizations. 
They  have  organized  associations  with  fictitious  but  high- 
sounding  names  and  have  subsidized  others.  They  have 
flooded  the  country  v^rith  Hterature,  more  than  75  per 
cent  of  which  is  false  in  its  statement  of  simple  facts.  They 
have  attempted  to  make  the  doctors  believe  that  health  insur- 
ance would  ruin  the  profession,  at  the  same  time  handing  out 
honey  phrases  about  sickness  prevention,  which,  when  analyzed, 
indicate  that  the  same  companies  are  attempting  to  lead  the  doc- 
tors to  State  medicine,  wherein  the  doctor  will  become  the  em- 
ployee of  the  State  in  preference  to  the  organized  scheme  of 
medical  practice  which  would  prevail  under  health  insurance. 
These  same  forces  have  tried  to  lead  the  great  fraternal  move- 
ment in  opposition  to  social  health  insurance  by  making  them 
believe  that  fraternalism  was  doomed.  As  a  matter  of  fact,  not 
over  2  per  cent  of  present  losses  from  sickness  are  being  carried 
by  fraternal  insurance  orders.  Surely,  the  great  body  of  men 
whose  inspiration  is  fraternalism  would  sacrifice,  if  sacrifices 
were  necessary,  the  2  per  cent  of  sickness  insurance  which  they 
now  carry  in  favor  of  a  social  scheme  which  would  take  care 
of  a  large  part  of  the  rest. 


GROUP   INSURANCE' 

One  of  the  newer  forms  of  industrial  service  work  is  group 
insurance.  Originated  seven  years  ago  by  a  leading  insurance 
company  of  New  York,  it  has  been  adopted  by  a  large  number 
of  other  insurance  companies  and  has  been  pushed  vigorously 
by  them  among  industrial  organizations.  There  are  today  hun- 
dreds of  group  insurance  policies  in  force  in  the  United  States 
and  tlie  total  amount  of  insurance  is  very  large. 

Ciroup  insin-ance  is  life  insurance  covering  all  or  a  certain 
portion  of  the  employees  of  an  industry,  and  provides  that  in 
case  of  death  while  in  the  employ  or  on  the  payroll  of  the  com- 
pany that  a  certain  indemnity  shall  be  paid  to  the  beneficiary 
designated.  In  the  first  policies  issued  the  amount  of  insurance 
was  equal  to  the  yearly  wage  or  salary  of  the  employee,  but  now 
in   most   instances   the    amount   of    insurance   is    either   $500   or 

1  By  H.  W.  Kimball.  Industrial  Management.  57:154-6.  February, 
1919. 


PROBLEMS    OF   LABOR  325 

$1,000.  Very  often  arrangements  are  made  for  the  insurance  to 
increase  from  year  to  year  until  a  certain  specified  maximum  of 
insurance  is  reached,  and  thus  length  of  service  gives  added 
benefits.  Often  the  employees  are  divided  into  classes  and  the 
married  men  are  insured  for  larger  amounts  than  the  unmarried 
men  and  women.  Some  employers  arrange  for  the  insurance 
to  begin  as  soon  as  the  employee  is  hired  so  that  the  prospective 
worker  can  be  told  "The  moment  you  enter  our  employ  you  are 
insured  for  $500."  Other  companies  provide  that  the  employee 
must  have  worked  three  or  six  months  before  being  eligible  for 
insurance.  By  this  method  it  is  hoped  that  the  new  employee 
will  be  induced  to  stay. 

No  Medical  Examination 

One  of  the  most  important  features  of  this  group  insurance 
is  that  no  medical  examination  is  required.  The  plant  itself  and 
the  workers  as  a  whole  are  inspected  by  the  insurance  company 
and  if  approved  all  the  employees  are  accepted  for  insurance. 
Inasmuch  as  probably  15  per  cent,  of  the  employees  of  the  aver- 
age plant  would  be  rejected  for  regular  insurance  on  medical 
grounds,  group  insurance  enables  an  employer  to  offer  insur- 
ance protection  to  a  large  number  of  his  employees  who  other- 
wise could  not  obtain  it.  Many  of  the  policies  provide  that  the 
insurance  money  shall  be  paid  in  monthly  installments  of  $50 
or  $100,  because  coming  in  this  way  rather  in  a  lump  sum  the 
money  will  more  likely  be  used  wisely  by  those  receiving  it. 
Disability  clauses  are  included  in  the  policy  contract  providing 
either  that  the  insurance  may  be  kept  in  force  in  case  of  total 
disability,  or  else  that  after  one  year  of  total  disability  the  in- 
surance shall  be  paid  in  a  certain  number  of  annual  installments. 
A  certificate  is  issued  to  each  person  insured,  explaining  the  de- 
tails of  the  insurance,  and  this  certificate  usually  contains  a  pic- 
ture of  the  plan  and  a  letter  signed  by  some  officer  of  the  com- 
pany. 

Premium   and   Cost 

The  kind  of  insurance  issued  under  this  group  plan  is  known 
in  insurance  language  as  yearly  renewable  term.  The  premiums 
are  figured  on  the  attained  age  of  each  employee  and  the  pre- 
miums are  paid  monthly  on  the  basis  of  the  number  of  persons 
actually  insured  that  month.  The  premium  cost  for  each  indi- 
vidual increases  year  by  year,  but  it  is  assumed  that  the  total 


326  SKLECTED   ARTICLES 

yearly  cost  to  the  company  will  not  vary  much  from  year  to 
year.  There  will  be  a  change  in  the  personnel,  but  as  the  older 
men  are  more  likely  to  die  and  their  places  will  be  filled  by  em- 
ployees at  younger  ages  the  average  age  of  the  plant  will  not  be 
likely  to  increase.  The  cost  of  this  insurance  is  exceedingly  low. 
The  expense  in  an  average  plant  will  not  exceed  one  per  cent,  of 
the  amount  of  insurance  per  year,  and  some  companies  by  large 
dividends  have  reduced  the  net  cost  so  that  per  year  for  each 
$1000  of  insurance  it  does  not  exceed  $6  to  $7. 

Arguments  Used  in  Favor  of  the  Plan 

There  are  five  arguments  advanced  for  group  instirance : 

1.  It  reduces  labor  turnover.  The  man  who  knows  that  the 
company  without  cost  to  himself  is  providing  life  iusurancc 
protection  for  his  family,  will  not  only  feel  more  kindly  toward 
the  company  but  will  be  less  likely  to  leave  its  employ.  How- 
far  this  is  true  it  is  difficult  to  say.  The  influence  upon  the 
worker  is  psychological  and  very  hard  to  weigh.  The  mere  fact 
of  the  insurance  will  not  keep  any  man  who  is  dissatisfied  from 
leaving.  It  will  not  hold  him  if  a  more  lucrative  job  is  offered 
elsewhere.  But  without  doubt  it  helps  to  create  a  certain  feeling 
of  contentment  and  a  sense  of  security  so  that  the  spirit  of  dis- 
content is  not  so  easily  awakened.  Certainly  the  man  will  not 
be  so  likely  to  be  looking  elsewhere  for  work.  Moreover,  it  has 
been  found  that  where  the  wives  and  mothers  of  employees  arc 
familiar  with  this  group  insurance  they  have  realized  its  value 
even  better  than  those  who  arc  insured,  and  have  often  used 
their  influence  for  the  continuous  employment  of  their  husbands 
and  children. 

2.  Group  insurance  establishes  good  will.  The  reputation 
of  any  company  is  one  of  its  most  valuable  assets,  and  a  reputa- 
tion among  the  workers  for  fair  and  liberal  dealing  is  much  to 
be  desired.  A  company  of  whom  it  is  said,  "It  looks  after  your 
family  if  you  die"  has  done  something  to  create  a  favorable 
atmosphere.  By  this  insurance  an  employer  says  to  his  workers, 
"If,  v/hile  you  are  in  'my  employ  you  should  be  taken  sick  and 
die,  I  will  see  that  for  a  certain  number  of  months  your  pay 
envelop  is  continued  to  your  family  so  that  they  will  not  be  in 
want.''  As  time  goes  on  and  these  death  benefits  are  paid 
throughout  the  community,  this  feature  of  employment  will  be 
talked  over  in  the  homes  and  a  feeling  of  kindliness  toward  the 
company   will   result.      But   group   insurance   alone   will   not  pro- 


PROBLKMS    OF    J.ABOR  327 

duce  good  will.  It  cannot  overcome  any  reputation  which  the 
company  may  have  for  shrewd  and  narrow  dealing.  If  this  is 
the  feeling  group  insurance  will  be  thought  of  as  simply  a  sop 
thrown  to  the  workers.  But  if  the  various  activities  of  the 
company  are  all  in  the  direction  of  justice  and  liberality  then 
such  insurance  will  be  an  added  influence  for  good  will. 

3.  This  form  of  insurance  can  be  used  as  a  reward  for  con- 
tinued service.  A  growing  feature  has  been  to  start  this  insur- 
ance at  a  minimum  amount  of  perhaps  $250  or  $300,  and  increase 
the  amount  of  protection  $100  each  year  until  a  maximum  of 
$1000  is  attained.  In  this  way  the  longer  a  man  is  in  the  employ 
of  the  company  the  larger  his  insurance  protection.  If  care  is 
taken  each  year  to  notify  the  employee  of  this  increase  it  has  a 
good  effect.  A  printed  card  or  letter  tactfully  worded  and 
signed  by  some  official  should  call  the  attention  of  the  worker 
to  the  increase. 

4.  Group  insurance  affords  a  much  needed  protection  for 
the  families  of  workers.  It  is  an  altogether  too  common  experi- 
ence to  have  some  emploj'ee  die  and  then  to  find  that  his  family 
has  been  left  almost  destitute.  Sometimes  the  company  provides 
for  the  most  immediate  needs  of  the  family;  often  a  paper  is 
passed  through  the  department  in  which  the  employee  worked 
and  a  sum  of  money  is  collected.  But  these  methods  of  pro- 
viding for  the  time  of  need  are  make-shifts  and  carry  the  stamp 
of  charity.  Group  insurance  makes  an  adequate  provision  and 
is  received  not  as  charity  but  as  a  benefit  which  properly  went 
with  the  man's  job. 

5.  Group  insurance  eliminates  one  argument  for  trades 
unionism.  Organizers  of  trades  unions  often  point  to  the  death 
benefits  which  are  paid  by  their  organizations  as  a  reason  for 
membership.  I  know  of  a  number  of  firms  who  have  adopted 
group  insurance  so  that  they  could  tell  their  employees  that  it 
was  not  necessary  for  them  to  join  any  union  in  order  to  re- 
ceive insurance  protection. 

Trades  Unionisin  and  Group  Insurance 

In  this  connection  it  may  be  said  that  trades  union  sentiment 
on  the  whole  has  not  been  in  favor  of  group  insurance.  Trade 
union  papers  have  stated  that  so  far  as  known  it  has  not  been 
introduced  into  union  shops.  At  the  present  time  this  is  not 
the  fact,  as  within  the  last  two  or  three  years  policies  of  group 
insurance  have  been  issued  for  industries  working  under  union 


328  SELECTl'.D   ARTICLES 

conditions.  Ardent  unionists  regard  this  movement  as  a  subsidy 
designed  to  keep  the  worker  quiet  and  contented,  and  llicy  feel 
that  its  cost  is  an  amount  withheld  from  wages. 

They  have  also  argued  that  the  insurance  can  at  any  time 
be  discontinued  by  the  employer,  that  such  discontinuance  can 
be  used  as  a  threat  to  keep  the  employee  at  work,  and  that  if 
the  insurance  is  discontinued  the  worker  finds  himself  without 
an  insurance  protection  which  he  had  depended  upon,  and  per- 
chance at  his  age  unable  to  get  insurance  elsewhere. 

This  last  argument  loses  something  of  its  force  because  now 
alp.iost  all  group  insurance  policies  provide  that  in  the  event  of 
termination  of  employment  an  employee  may  without  medical 
examination  convert  his  group  insurance  into  any  form  of  in- 
surance issued  by  the  insurance  company.  This  policy  is  issued 
at  the  then  current  rates.  This  feature  makes  a  good  talking 
point  and  is  very  fair  to  the  insured,  but  in  actual  practise  its 
value  is  very  limited.  Few  men  on  leaving  will  take  the  trouble 
to  get  in  touch  with  the  insurance  company  and  take  the  steps 
necessary  to  keep  the  policy  in  force. 

Arguments  Against  Group   Insurance 

The  arguments  against  group  insurance  may  be  summarized 
as : 

1.  It  does  not  accomplish  what  is  claimed  for  it.  Investiga- 
tions in  many  instances  have  shown  that  it  has  been  apparently 
valueless  to  hold  the  worker  in  face  of  the  lure  of  a  better  job. 
Nor  does  group  insurance  cast  out  of  a  man  that  inherent  rest- 
lessness which  impels  him  every  once  in  a  while  to  shift  his 
place  of  employment.  Its  effect  upon  labor  turnover  often  ap- 
pears negligible.  After  a  little  men  receive  it  as  a  matter  of 
course,  and  do  not  have  any  more  loyal  feeling  toward  the  com- 
pany because  of  it. 

2.  The  real  value  of  this  insurance  protection  is  very  small. 
.•\s  soon  as  a  man's  name  is  taken  from  the  payroll  his  insurance 
ceases.  With  the  drifting  of  workers  from  one  industry  to 
another,  the  man  very  often  is  taken  sick  while  out  of  work  or 
when  he  has  not  been  long  enough  at  his  job  to  be  entitled  to 
insurance  protection.  The  experience  of  the  insurance  compa- 
nies is  that  a  large  proportion  of  the  death  claims  paid  are  the 
result  of  accident,  suicides  or  sudden  death  from  pneumonia 
or  heart  failure.  Moreover,  the  worker  who  has  some  chronic 
disease  of  which  he  finally  dies  often  leaves  his  work  before  he 


PROBLEMS    OF   LABOR  329 

is  sick  unto  death.     He  just  gets  through,  is  dropped  from  the 
payroll  of  the  companj',  and  so  loses  his  insurance  protection. 

3.  Group  insurance  is  simply  a  form  of  paternahsm.  The 
company  docs  for  the  worker  something  that  he  had  rather  do 
for  himself.  The  attitude  of  many  manufacturers  after  experi- 
menting with  various  forms  of  welfare  work  is  that  it  is  far 
better  just  to  pay  the  best  wages  possible  and  leave  the  em- 
ployee to  care  for  himself  as  he  deems  wise.  This  also  is  in 
general  the  point  of  view  of  the  trade  unionist.  He  wants  the 
highest  possible  wage  and  freedom  to  provide  for  himself.  He 
prefers  to  buy  his  own  insurance.  He  fights  shy  of  any  insur- 
ance which  binds  him  to  the  company.  Paternalism  is  an  out- 
grown form  of  relationship,  and  has  been  supplanted  by  inde- 
pendent bargaining.  The  next  step  in  industry  is  not  a  return 
to  paternalism  but  forward  to  some  form  of  cooperation. 

4.  The  employer  can  carry  this  insurance  more  cheaply 
himself.  The  insurance  companies  would  not  undertake  this 
business  if  it  were  not  profitable.  In  fact  to  date  it  has  been 
very  profitable  for  them.  A  number  of  years  ago  a  large  con- 
cern took  out  insurance  for  its  employees  and  paid  a  premium  of 
about  $8000  a  year.  In  two  years  there  were  two  deaths  with 
insurance  of  $1000  each.  Some  $3000  were  paid  back  in  divi- 
dends by  the  insuring  company.  This  concern  concluded  that 
it  could  much  more  cheaply  carry  its  own  insurance,  discon- 
tinued the  policy  contract,  and  since  then  has  paid  the  death 
benefits  itself.  A  large  concern  can  doubtless  do  this  and  save 
money.  If  a  sinking  fund  is  established  and  each  month  the 
amount  that  would  have  been  paid  to  the  insurance  company 
is  placed  in  that  fund  any  concern  over  a  period  of  years  would 
doubtless  find  that  the  insurance  cost  had  been  lessened. 

There  are  two  arguments  against  such  self  insurance : 

1.  There  is  always  a  certain  chance,  small  indeed,  yet  real, 
that  some  catastrophe  or  epidemic  may  cause  so  large  a  number 
of  death  claims.  Insurance  is  based  on  the  law  of  averages,  and 
the  insurance  companies  carrying  groups  in  many  different  sec- 
tions can  easily  meet  a  situation  that  would  swamp  any  local 
concern. 

2.  It  is  argued  by  the  insurance  companies  that  the  workers 
will  not  have  the  same  confidence  in  the  insurance  if  it  is  car- 
ried by  the  company  employing  them  as  they  will  if  the  insur- 
ance is  issued  by  a  large  insurance  company  with  a  national 
reputation.     The   force   of  ^his   argument   is   largely  dependent 


330  SELECTED   ARTICLES 

upon  the  confidence  or  lack  of  confidence  which  ihc  employees 
have  in  the  company  for  whom  they  are  working.  The  com- 
pany can  cancel  the  insurance  policy  at  any  time,  and  an  in- 
surance certificate  issued  hy  any  well  established  organization 
would  probably  be  as  valuable  so  far  as  insurance  protection  is 
concerned  as  that  issued  by  an  insurance  company. 

Si'ltiny  Croup  Insurance  to  the  IVorkers 

riie  art  of  selling  group  insurance  to  the  employer  has  been 
carefully  developed,  but  there  is  even  more  need,  if  group  in- 
surance is  to  succeed,  that  it  be  sold  effectively  to  the  workers. 
A  fact  not  clearly  recognized  is  that  the  value  of  group  insur- 
ance in  any  industry  depends  upon  the  thoroughness  with  which 
it  is  understood  by  those  who  benefit  from  it.  Many  manu- 
facturers have  hastily  adopted  group  insurance,  given  insurance 
certificates  to  the  employees,  and  felt  that  they  had  done  all  that 
was  necessary.  But  a  large  proportion  of  the  employees  prob- 
ably had  very  little  idea  of  what  they  were  receiving,  and  cer- 
tainly- were  not  impressed  with  its  value.  Group  insurance  to 
be  well  worth  while  must  be  well  advertised.  One  concern  of 
wliicli  I  know  explained  the  plan  in  a  series  of  leaflets  placed 
in  the  pay  envelopes,  then  group  meetings  of  the  employees 
were  held  and  the  plan  was  described  more  in  detail.  Questions 
were  asked  and  answered.  Every  objection  was  fairly  met. 
Certificates  were  then  issued  but  the  group  plan  was  not  allowed 
to  drop  out  of  sight.  Through  bulletins  and  through  the  plant 
paper  its  advantages  and  the  stories  of  those  who  have  benefited 
by  it  have  been  kept  before  the  workers.  In  that  factory  group 
insurance  has  been  understood  and  appreciated. 

Croup  Insurance  and  Mutual  Benefit 

■  I-'erhaps  one  of  the  most  satisfactory  plans  of  conducting 
group  insurance  is  that  adopted  in  various  plants  of  combining 
group  insurance  with  a  nuiUial  benefit  association.  The  em- 
ployee pays  his  dues  as  a  member  of  the  association  and  in  this 
way  provides  for  benefits  to  be  paid  him  in  case  of  sickness,  and 
the  company  agrees  to  cover  each  member  of  the  association 
with  insurance  protection.  This  is  true  cooperation.  The  em- 
ployer says  to  his  employees,  "You  do  something  to  protect 
yourself  and  we  will  meet  you  half  way.  Together  we  will  see 
that  you  have  adequate  protection  against  both  the  hazards  of 

sickness   and   of   death."     This   plai^  has   worked  well   wherever 


PROBLKMS    OF    LABOR  33t 

adopted.  It  makes  the  insurance  something  more  than  a  gift. 
It  links  up  the  insurance  with  an  organization  of  the  employees, 
and  keeps  its  benefits  before  them. 

Group  insurance  is  growing  in  favor.  Where  adopted  it  has 
rarely  discontinued.  It  affords  valuable  protection  at  a  low  cost 
and  where  clearly  understood  by  the  workers  has  created  good 
will  and  has  tended  to  accomplish  the  good  claimed  for  it. 


SOCIAL  INSURANCE  IN  THE  UNITED 
STATES ' 

Social  insurance  may  be  defined  as  mutual  risk  bearing  from 
which  the  elements  of  competitive  costs  and  private  profits  are 
excluded.  Social  insurance  is  not  necessarily  state  insurance; 
any  form  of  mutual  non-competitive  and  non-profiteering  in- 
surance is  true  social  insurance.  Accepting  this  definition,  it  is 
evident  that  insurance  against  property  losses  due  to  fire,  flood, 
hail,  lightning,  etc.,  may  be  covered  by  social  insurance  as  well 
as  insurance  against  personal  losses  due  to  accident,  illness,  old 
age,  invalidity  unemplojTnent,  and  death.  In  this  country  it 
is  usual  to  refer  to  workmen's  accident  compensation  as  a  form 
of  social  insurance.  In  fact,  but  very  few  of  our  states  have 
provided  in  their  compensation  laws  for  community  insurance 
against  the  losses  due  to  accidents,  and  in  but  three  or  four 
states  are  the  state  accident  funds  so  organized  as  to  exclude 
the  persistent  and  pernicious  elements  of  competitive  costs  and 
private  profits.  Social  insurance  against  property  losses  is  much 
more  in  evidence  in  this  country  than  social  insurance  against 
personal  losses.  The  insurance  of  shipping  instituted  in  the 
United  Treasury  Department  at  the  outbreak  of  the  great  w'ar 
is  an  instance  of  true  social  insurance.  In  this  instance  private, 
profiteering  insurance  was  absolutely  inadequate  to  cope  with 
the  situation.  Insurance  rates  in  the  private  companies  were 
utterly  prohibitive,  so  the  United  States  government  went  into 
the  insurance  business  and  by  reason  of  its  virtual  monopoly  in 
this  field  was  able  to  eliminate  the  costs  of  securing  business  by 
competitive  advertising  and  agenting  and  to  distribute  losses  of 
ships  and  cargoes  over  such  a  large  number  of  ship  owners  and 
cargo  owners  that  costs  were  brought  down  within  reason.     The 

^  By  Royal  Meeker.  United  States  Commissioner  of  Labor  Statistics. 
Proceedings,    Conference    of   Social    Work.      Pittsburgh,    19 17. 


332  SELECTED   ARTICLES 

results  have  been  most  beneficial,  as  otherwise  shipping  rates 
would  have  driven  shipping  from  the  seas  more  effectively  than 
German  raiders  and  submarines. 

The  term  social  insurance  as  used  today,  however,  always 
refers  to  insurance  against  personal  hazards  of  workers  or  those 
in  the  lower  income  groups.  In  this  sense  there  is  almost  no 
such  thing  as  social  insurance  in  the  United  States.  By  way 
of  illustration,  take  the  state  of  Pennsylvania  which  has  a  state 
insurance  fund  in  which  employers  may  insure  against  the  risk 
of  injuries  to  their  workers  from  industrial  accidents.  The 
Pennsylvania  state  fund,  however,  cannot  be  correctly  desig- 
nated as  an  example  of  true  social  insurance  because,  first,  it 
does  not  provide  for  a  true  communal  risk  bearing,  and,  second, 
the  element  of  private  profits  is  not  eliminated  from  the  prem- 
ium rates.  The  risk  is  not  carried  as  a  community  risk  because 
the  insurance  business  is  still  carried  on  as  a  competitive  busi- 
ness in  Pennsylvania.  Instead  of  industrial  accident  risks  being 
carried  mutually  either  by  the  state,  local  communities  or  dif- 
ferent industries,  we  find  the  state  dotted  over  with  private, 
profit-seeking,  intensely  competitive  insurance  companies.  Profit, 
not  mutual  apportionment  of  losses,  is  the  underlying  principle 
of  all  insurance  undertaken  as  a  private  enterprise.  In  Pennsyl- 
vania it  is  necessary  for  the  state  fund  to  compete  with  private 
insurance  companies  in  securing  business,  therefore  the  heavy 
overhead  charges  inevitable  in  private,  profiteering,  competitive 
insurance  still  persist. 

The  socializing  of  insurance  means  eliminating  competition 
and  the  consequent  advertising  expenses  and  other  charges  due 
to  rivalry.  Socializing  insurance  will  bring  about  four  great 
economies  which  will  reduce  enormously  the  present  excessively 
high  overhead  charges  which  put  any  adequate  insurance  be- 
yond the  reach  of  the  ordinary  workingman  or  working  woman. 

(i)  It  will  eliminate  the  expense  of  getting  and  keeping 
policy  holders.  The  items  of  expense  which  rank  casualty, 
health,  and  the  socalled  industrial  insurance  among  the  most  ex- 
pensive luxuries  offered  for  sale  are  the  expense  of  writing 
new  insurance  and  of  renewing  expired  or  lapsed  policies. 

(2)  It  will  eliminate  the  expense  of  collecting  premiums, 
which  in  the  case  of  casualty,  health  and  industrial  insurance 
means  a  very  large  proportion  of  the  very  high  expenses  for 
these  kinds  of  insurance. 

(3)  It  will   eliminate  the  expense  and  risk  of  properly  in- 


PROBLEMS    OF   LABOR  333 

vesting  tl.^'  funds  collected  in  premiums.  The  hazards  of  in- 
vestment are  brought  home  to  us  in  these  precarious  times  when 
war  conditions  are  playing  ducks  and  drakes  with  investment 
values. 

(4)  It  will  eliminate  the  expense  of  profits  whether  these 
profits  go  in  dividends  to  shareholders  or  in  unearned  salaries 
to  officials. 

All  these  items  of  expense  will  immediately  disappear  upon 
the  establishment  of  true  social  insurance,  and  insurance  instead 
of  being  a  prohibitively  expensive  luxur)'  will  become  what  it 
.should  have  been  from  the  beginning  a  cheap  necessity  within 
the  means  of  every  person  who  needs  it. 

The  subject  of  social  insurance  is  one  of  the  most  vital  ques- 
tions confronting  us  at  this  time.  Attempts  have  been  made  to 
minimize  the  importance  of  insurance  and  la.v  emphasis  upon 
the  prevention  of  accidents,  disease,  and  death  as  of  vastly 
greater  importance  than  compensation  insurance  against  these 
hazards. 

Our  workmen's  compensation  commissions  have,  as  I  see  it, 
three  great  functions  to  perform : 

(i)     To  prevent  all  preventable  accidents; 

(2)  To  cure  all  curable  injuries; 

(3)  To  compensate  all  compensatable  disabilities. 

It  will  be  admitted  without  discussion  that  it  is  immensely 
more  important  to  prevent  a  w^orkman  from  getting  his  hands 
crushed  in  the  calendar  rolls  in  a  rubber  mill,  than  it  is  to  give 
him  surgical  and  hospital  treatment  to  restore  as  fully  and  as 
quickly  as  possible  the  use  of  his  maimed  members.  But  not 
all  accidents  can  be  prevented.  It  is  axiomatic  that  the  surgical 
and  hospital  treatment  needed  to  transform  a  total  permanent 
disability  into  a  partial  permanent  disabilitv'  is  immensely  more 
important  to  the  injured  worker  and  to  society  than  the  doling 
out  of  compensation  payments.  All  experience  shows  that 
money  expended  in  restorative  treatment  of  disabled  men  and 
women  is  the  best  kind  of  good  economy.  Yet  the  sums  the 
commissions  may  expend  for  medical,  surgical,  and  hospital 
treatment  range  from  nothing  in  Washington  and  Wyoming, 
$25  to  $75  in  Pennsylvania,  up  to  $300  for  special  cases  in  West 
\'irginia.  Nine  states  and  Porto  Rico  have  no  specific  limit  on 
expenses  for  restorative  treatment,  but  one  of  these  states, 
Texas,  limits  the  time  of  such  treatment  to  one  week,  and  Okla- 
homa allows  only  15  days'  treatment. 


334  SELECTED   ARTICLES 

Although  adjusting  and  awarding  compensations  are  much 
less  important  than  the  first  two  functions  named,  this  third 
function  is  by  no  means  unimportant.  Indeed,  the  compulsory 
pajmient  of  compensation  for  industrial  accidents  is  the  only 
thing  that  brought  home  to  employers  the  fact  that  accidents 
are  the  worst  form  of  extravagance ;  that  every  accident  costs 
money ;  that  a  high  accident  rate  connotes  inefliciency  in  shop 
management;  that  most  industrial  accidents  are  not  providential 
and  predestined,  but,  on  the  contrary,  are  preventable ;  and  that 
a  failure  to  prevent  preventable  accidents  is  inhuman  as  well 
as  costly. 

We  are  beginning  to  realize  that  accidental  injuries  are  not 
fore-ordained  from  the  foundation  of  the  earth.  We  have  not 
yet  begun  to  think  in  this  way  about  illness  or  even  about  acci- 
dents other  than  industrial  accidents.  I  feel  very  strongly  that 
the  workmen's  compensation  laws  should  be  extended  in  scope 
immediately  to  include  all  occupational  illness,  and,  as  soon  as 
public  sentiment  can  be  educated,  to  include  all  accidents 
whether  in  the  course  of  industry  or  not.  It  makes  no  difTer- 
ence  to  an  injured  man  and  his  family  whether  his  leg  is  burned 
off  by  molten  metal  in  a  foundry  or  whether  it  is  cut  off  by  a 
trolley  car  in  the  street.  The  incapacity  he  suffers  is  the  same 
in  either  case.  The  payment  of  compensation  for  incapacities 
suffered  through  street  accidents  will  add  considerably  to  the 
amounts  paid  in  compensation,  but  it  will  not  add  to  the  accident 
burden.  On  the  contrary,  it  will  lighten  this  burden  which 
now  falls  with  crushing  weight  upon  the  victims  of  non-in- 
dustrial accidents  and  their  families,  by  distributing  their  bur- 
dens more  equitably  and  by  directing  attention  to  the  fact  that 
the  burden  exists.  One  of  the  most  peculiar  and  exasperating 
psychological  phenomena  to  be  found  anywhere  is  that  pseudo- 
economic  notion  that  accidents  and  illness  cost  nothing  as  long 
as  the  state  makes  no  provision  to  pay  anything  to  the  victims  or 
their  dependents.  So  long  as  we  collectively  and  persistently 
keep  our  eyes  and  minds  closed,  accidents  and  sickness  have  no 
existence  for  us.  Compensation  laws  did  not  create  industrial 
accidents.  They  merely  provided  a  more  equable  distribution 
of  that  burden  which  theretofore  was  being  carried  by  relatives 
and  friends  of  the  victims  and  by  the  poor-hou.ses  and  other 
charitable  institutions,  on  the  part  of  the  public.  As  soon  as 
employers  were  obliged  to  bear  some  part  of  the  burden  of  in- 
lustrial  accidents,  they  became  much  interested  in  Safety  F"irst, 


PROBLEMS    OF   LABOR  335 

with  the  result  that  accident  rates,  if  not  absohitely  lower  than 
formerly  are  doubtless  much  lower  than  they  would  now  be 
had  there  been  no  compensation  laws  enacted. 

Our  compensation  laws  must  be  simplified  and  strengthened 
in  their  administrative  features  as  well  as  extended  in  scope 
if  they  are  to  accomplish  what  we  have  a  right  to  expect  of 
them.  The  administration  of  our  compensation  laws  is  now  too 
much  taken  up  with  the  relatively  unimportant  business  of 
merely  handing  out  compensation  doles  to  injured  workmen. 
Our  industrial  boards  and  commissons  are  doing  all  too  little 
in  the  way  of  preventing  accidents  and  are  doing  almost  nothing 
in  the  way  of  medical,  surgical,  and  hospital  treatment  to  re- 
store injured  workers  to  industry  as  quickly  and  completely  as 
possible.  This  failure  on  the  part  of  our  compensation  admin- 
istration is  due  to  many  causes.  The  most  important  cause  is 
lack  of  understanding  by  our  state  legislatures  and  the  conse- 
quent paucity  of  appropriations  to  enable  the  boards  and  com- 
missions to  do  the  work  they  ought  to  do  in  the  way  of  accident 
prevention  and  medical,  surgical,  and  restorative  treatment. 

Accident  boards  and  commissions  are  made  up  for  the  most 
part  of  men  untrained  in  the  traditions  and  practices  of  the  legal 
profession.  If  hearings  before  these  bodies  are  to  be  conducted 
by  che?p  lawyers  in  an  atmosphere  of  tawdry  legal  profundity, 
the  results  arc  bound  to  be  disastrous.  The  foolish,  time-con- 
suming questions  asked  by  self-seeking  lawyers  of  equally  self- 
seeking  physicians  invariably  arouse  the  ire  of  the  laj'man,  un- 
trained and  unaccustomed  to  the  intricacies  of  legal  quibblmg 
and  the  dignity  of  the  "law's  delays."  As  a  consequence,  an 
extremely  irritated  boaid  may  be  exasperated  into  doing  grave 
injustice  to  one  or  both  parties  in  a  case. 

The  only  cure  for  this  serious  condition  which  threatens  to 
break  down  the  effectiveness  of  compensation  legislation  is  to 
socialize  our  workmen's  compensation  laws.  By  that  I  mean 
the  absolute  exclusion  of  casualty  insurance  companies  frorrt 
the  writing  of  risks  under  the  workmen's  compensation  laws. 
The  making  of  private  profits  out  of  the  misfortunes  of  the 
workers  is  intolerable.  It  was  a  costly  and  inexcusable  blunder 
to  have  allowed  the  casualty  companies  to  make  use  of  the  com- 
pensation laws  for  the  purpose  of  exploiting  the  injured  work- 
men for  profit.  The  way  to  remedy  this  blunder  is  to  remedy 
it.  All  stock  insurance  companies  should  be  excluded  at  the 
earliest  possible  moment   from  writing  workmen's  compensation 


336  SELECTED   ARTICLES 

insurance.  All  incentive  for  meddling  in  the  administration  of 
workmen's  compensation  laws  should  be  taken  away  from  insur- 
ance companies. 

The  next  logical  step  after  the  revamping  and  extension  of 
our  workmen's  compensation  laws  would  be  the  enactment  of 
invalidity  and  old  age  insurance  legislation.  If  a  practical  way 
can  be  found,  I  should  favor  contributory  insurance  to  cover 
these  hazards.  However,  I  regard  the  payment  by  the  worker 
in  whole  or  in  part,  for  insurance  against  invalidity  and  old  age 
as  a  mere  detail.  It  makes  little  difference  in  the  results 
wli ether  the  workers  pay  or  the  state  pays,  as  is  demonstrated 
liy  the  operation  of  the  British  non-contributory  Old  Age  Pen- 
sion Act.  Administration  is  greatly  simplified  and  rendered 
cheaper  if  insurance  premiums  are  assessed  on  the  different 
industries  or  the  community  as  a  whole. 

For  some  time  past  attention  has  been  centered  upon  health 
insurance  almost  to  the  exclusion  of  all  other  forms  of  social 
or  pseudo-social  insurance.  In  fact,  the  term  social  insurance 
has  been  perverted  in  the  minds  of  many  to  mean  merely  health 
insurance.  As  was  to  be  expected,  some  of  the  most  powerful 
insurance  companies  have  professed  a  profound  friendliness  for 
the  general  principle  of  health  insurance  at  the  same  time  that 
they  have  strenuously  fought  any  practical  program  for  the 
establishment  of  a  health  insurance  system. 

Many  curious  arguments  have  been  urged  against  health  in- 
surance. It  is  stated,  on  the  one  hand,  that  illness  is  relatively 
negligible  in  this  country  and,  on  the  other  hand,  that  it  is  so 
widespread  that  any  insurance  scheme  would  necessarily  break 
down  because  of  the  enormous  expense  involved.  On  the  third 
hand,  it  is  stated  that  we  know  nothing  about  how  much  illness 
there  is  in  this  country — whether  there  be  much  or  little.  It  is 
also  argued  that  illness  has  none  of  the  disastrous  consequences 
in  this  country  which  obtain  in  the  poorer  and  more  populous 
European  countries.  It  is  asserted  that  the  working  people  have 
incomes  sufficient  to  enable  them  to  hire  physicians  to  care  for 
themselves  and  their  families;  that  a  job  always  awaits  the 
worker  upon  his  recovery  from  illness.  The  experience  of  social 
workers  certainly  does  not  confirm  these  allegations.  Illness  is 
all  too  frequent  in  this  country  and  is  fraught  with  most  serious- 
ness consequences.  Until  after  the  outbreak  of  the  great  war 
unemployment  had  been  the  greatest  curse  of  the  w^orkers  of  the 
country.     Even  today  in  the  face  of  what  is  commonly  denomi- 


PROBLEMS   OF   LABOR  ,33.7 

iiated  by  employers  as  a  terrific  dearth  of  labor,  men  are  still 
being ,  scrapped  at  the  age  of  40,  while  .in  European  countries 
jmen  continue  in  active  employment  well  beyond  the  age  of  ^. 
Even  if  it  is  now  true  that  workers  vvho  do  not  have  too  many 
white  hairs  may  readily,  find  employment,  that  has  nothing  to 
do  v.'ith  the  question  of  providing  adequate  medical,  surgical, 
and  hospital  treatment  for  the  worker  when  he  is  ill  and  the 
payment  of  money,  benefits  in  order  to  sustain  his  family  in 
something  akin  to  decency  during  th^  period  of  his  illness.  .,.. 
-^  .It  is  alleged  that  voluntary  methods  are  providing  adequately 
^pr  .working  people.  It  is.  asserted  confidently  that  nothing  is 
kiiown  about  the  extent  and  the  adequacy  of  voluntary  benefit 
funds  of  trade  unions,  establishments,  and  mutual  associations. 
Jttis  a  sufficient  answer  to  this  allegation  to  call  attention  to  thp 
23rd  Annual  Report  of  the  United  States  Commissioner,  of 
Labor,  in  which  are  given  the_  results  of  a  yery  cornpjete  study 
q£  these  voluntary  sickness  benefit  funds.  The  conditions  as 
slwwii  in  the  23rd  Annual  Report  of  the  Commissioner  of  Labor 
Statistics  have  not  materially  changed.  None  of  the  trade  union 
sick  benefit  funds  provides  for  medical,  surgical,  and  hospital 
treatment.  Only  a  very  few  provide  sanatoria  and  homes  for 
the;  aged  and  disabled.  All  the  voluntary  agencies  combine^d 
rnake  quite  inadequate  provision  for  only  a.  srnalj,  minority^ ..pi 
workers  and  they  the  least  needy  of  them  all.  •  ■  r 

t  ,_  Under  the  voluntary  system,  if  it  be  lawful  to  call  such  chaos 
a^fSj'stem,  the  people  who  are  in  most  need  of  sickness  and  other 
insurance  do  not  get  it  at  all  and  only  those  who  are  best,  situ- 
ated economically  are.  able  to  purchase  insyrance.  ,,,<Jj-f;^  vfr>-  '• 
.If  I  believed  that  social  health  insurance  was  rnerelj'' rg,:sy§tem 
for  dealing  put  doles  in  reliejE,  to,  the  families,  and  dependeiits  of 
sick  workmen,  I  -^vould  have,  very  little  enthusiasm  for  it.  It 
is  because  I  know  that  healtli.  insurance, will  call  attention  to  the 
costliness  of  illness  that  I  am  in  favor  of  vmiversal  compulsory 
health  insurance.  It  took  compulsory  workmen's  accident  com- 
pensation to  bring  home  to  the  employers  the  fact  that  every 
accident  costs  money  whether  it  is  compensated  for  or  not.  We 
have  already  realized  in  part  at  least  that  accidents  are  terribly 
expensive ;  that  the  expensiveness  of  accidents  did  not  begin  with 
the  enactment  of  compensation  laws,  but  that  some  one  nnist 
inevitably  pay  the  piper.  Before  compulsory  accident  compensa- 
lion  laws  were  enacted  the  burden  fell  upon  the  workers  almost 
entirely  because  the  workers  were  least  able  to  bear  the  burden 


338  SELECTED   ARTICLES 

and  were,  tlierefore,  unable  to  escape  hearing  it.  What  is  true  of 
disahilities  from  accidents  is  true  of  disabilities  from  illness. 
Health  insurance  legislation  can  neither  increase  nor  decrease  the 
burdens  due  to  illness,  except  as  such  legislation  increases  or  de- 
creases the  amount  of  lost  time  due  to  illness.  One  effect  of 
compulsory  health  insurance  will  be  to  remind  employers  very 
forcibly  that  sickness  is  uneconomical,  wasteful ;  that  sickness 
costs  real  money  to  the  employer  and  the  public ;  and  that  much 
existing:  illness  is  either  preventable  or  curable. 

A  favorite  argument  against  all  social  insurance  is  that  it  is 
socialism.  This  strikes  me  as  being  the  most  telling  argument 
for  socialism  that  could  be  uttered.  Instead  of  condemning  so- 
cial insurance,  it  highly  commends  socialism.  I  do  not  happen 
to  be  a  socialist,  but  if  it  is  socialism  to  provide  adequate  pro- 
tection to  the  lives,  health,  and  well-being  of  our  working  popu- 
lation, then  let  us  have  some  more  of  the  same. 

Another  stock  objection  to  social  insurance  is  the  incompe- 
tence of  public  officials  which  leads  to  extravagance  in  admin- 
istration. There  is  unfortunately  much  truth  in  this  allegation. 
However,  no  trustworthy  data  as  to  the  cost  of  state  insurance 
as  compared  with  private  insurance  have  ever  been  worked  out. 
From  such  data  as  exist,  however,  it  appears  that  the  premium 
rates  under  true  social  insurance  could  be  increased  50  per  cent, 
because  of  incompetence  and  extravagance  in  administration  and 
yet  leave  a  margin  in  favor  of  social  insurance  as  compared 
with  private,  competitive,  profiteering  insurance.  H  the  public 
are  willing  to  trust  themselves  to  conduct  insurance  econom- 
ically, efficiently  and  honestly,  they  can  still  secure  the  benefits 
of  social  insurance  by  establishing  mutual  associations  for  the 
administration  of  the  funds.  A  genuine  mutual  association  has 
practically  all  the  advantages  of  state  conducted  insurance  men- 
tioned above  and  it  is  free  to  conduct  its  affairs  so  as  to  secure 
the  greatest  efficiency. 


HOUSING 

HOUSING  AND  TRANSPORTATION 

PROBLEMS  IN  RELATION  TO 

LABOR  PLACEMENT^ 

The  broad  outlines  of  the  question  dealt  with  by  this  paper 
may  be  stated  briefly.  The  details  would  fill  volumes,  and  but 
little  has  j-et  been  assembled  in  useable  form.  Labor  placement, 
we  shall  assume,  includes  labor  retention,  i.e.,  not  only  the  se- 
curing of  a  supply  of  labor  but  what  is  more  important,  the 
reducing  of  its  turnover.  The  latter  part  of  the  question  has 
been  under  scrutiny  for  some  time  and  many  obvious  reasons 
for  our  great  labor  turnover  have  been  noted  and  some  have 
been  changed.  As  in  infant  mortality,  even  a  superficial  study 
brought  to  light  certain  conditions  that  a  minimum  of  group 
or  community  action  could  change — as  the  substitution  of  clean 
and  modified  milk  for  the  dirty,  diluted  stuff  that  had  been  sold 
before — and  which  being  changed  caused  an  immediate  and 
notable  improvement. 

So  easy  and  so  efficacious,  comparatively,  are  these  first 
changes  that  some  of  us  have  been  inclined  to  persuade  our- 
selves that  they  comprise  our  whole  task.  An  alley  that  has 
been  buried  under  an  accumulation  of  filth  is  vastly  improved 
by  shovel  work,  but  it  is  not  really  clean  until  broom  and  water 
have  played  their  part.  So  improvements  within  the  plant, 
whether  of  physical  conditions  or  of  management,  will  make 
notable  improvement  in  labor  turnover  and  at  a  comparative!}' 
small  expenditure  of  thought  and  energy,  for  they  require  but 
a  minimum  of  community  or  group  action. 

But  having  achieved  so  much  we  find  that  the  task  is  not 
completed.  A  generation  ago  our  present  condition,  in  our 
more  progressive  industrial  enterprises  at  least,  would  have 
seemed  almost  Utopian.  But  having  done  so  much  we  find  that 
labor  turnover  is  not  yet  reduced  to  the  place  where  it  should 
be  and  dimly  we  are  beginning  to  see  that  labor  turnover  is  a 

1  By  John  Ihlder.  Annals  of  the  American  Academy  8i-';i-s 
January,    1919.  ^' 


340  SELECTED   ARTICLES 

matter  of  concern  not  only  to  individual  employers  but  to  those 
who  are  concerned  with  such  community  problems  as  deserting 
husbands ;  and  that  conversely  the  employer  has  reason  to  be 
concerned,  because  of  his  interest  in  the  efficiency  of  his  own 
plant,  in  these  community  problems.  The  deserting  husband 
not  only  leaves  destitute  wife  and  children  for  the  community 
to  support  but  he  loses  the  spirit  which  makes  a  first  class  work- 
man and  by  degrees  becomes  a  drifter,  a  vagrant,  one  of  the 
army  of  unemployables  the  attempt  to  employ  whom  is  one  of 
the  great  wastes  of  industry.  And  the  reason  for  desertion  in 
the  great  majority  of  cases  probably  lies  quite  outside  the  fac- 
jt^ry  gates  and  only  the  effect  is  felt  inside. 

,.,„Had  that  man  lived  in  a  better  home,  in  a  better  neighbor- 
hood, had  his  children  attended  better  schools,  had  his  neigh- 
hors  been  more  satisfied  with  their  lot,  had  more  to  lose  and  so 
have  had  a  different  tone  in  their  daily  conversation,  the  deserter 
would  probably  have  resisted  the  temptation  to  which  he  yielded, 
perhaps  a  little  thing  in  itself,  but  the  last  of  many  things  big 
aiid;  little,— impatience  at  the  jam  in  an  overcrowded  street  car 
to  which  he  was  subjected  morning  and  evening,  or,  of  more 
consequence,  remorse  that  the  cost  of  sociability  at  the  corner 
saloon  made  impossible  the  paying  of  grocer's  bills.  These  can- 
not be  affected  by  improvement  within  the  plant;  they  can  be 
affected  only  by  improvement  of  living  conditions,  and  the  latter 
may  be  summarized  as  improvement  of  the  dwelling. 
_.jj.But  here  again  it  is  necessary  for  us  to  broaden  our  vision 
f^pm  the  Individual  tc  the  community.  Housing  betterment 
began  by  attempts  to  improve  individual  houses,  and  it  made 
.C0|ijisiderfible  improvement.  It  did  the  shovel  work — or  at  least 
hjsgap  itr-of ,  somewhat  lessening  the  squalor  and  filth  of  slum 
areas.  •'Transportation  began  too  by  accepting  existing  condi- 
tiprjSb.ajjd.  seeking  only  to  mitigate  them  by  enabling  those  who 
had  tlic  time  and  the  money  to  escape  to  a  better  environment. 
But  having  done  the  shovel  work  where  it  has  been  done,  we 
learned  that  it  was  after  all  but  superficial,  that  it  must  be  done 
oyer  and  over  again,  for  it  makes  no  change  in  the  basic  con- 
ditions which  first  rendered  it  necessary.  Instead  of  improved 
slutns,  instead  of  expensive  and  wasteful  means  of  escape,  we 
^egin  tp;  realize  tliat  there  will  be  economy  in  abolishing  slums, 
in  .using,  transportation  not  to  mitigate  the  effects  of  bad  condi- 
tions but  to  serve  the  community  as  a  community.  Transporta- 
tion, e\en  the  least  expensive  forms,  is  wasteful  if  used'  need- 


PROBLEMS   OF   LABOR  341 

lessly,  wasteful  in  time,  iiealth,  money.  The  more  expensive 
forms,  especially  the  most  expensive  form,  the  subway,  is  ruin- 
ous if  used  as  a  substitute  for  walking  or  even  for  trolleys. 

So  both  housing  and  transportation  lead  us  inevitably  to  city 
planning,  and  city  planning  is  based  upon  two  things ;  first,  the 
needs  of  business  and  industry,  which  create  the  city;  second, 
upon  the  needs  of  the  home,  which  make  the  city  worth  creating. 
Having  come  then  to  visualize  the  city  as  aii  entity,  not  as  a 
mere  aggregation  of  individuals,  we  are  able  to  consider  the 
proper  distribution  of  its  parts  and  to  plan  for  their  needs. 

Business  and  industry  must  first  be  considered  because  from 
them  flows  the  wealth  upon  which  all  else  depends.  Those 
areas  best  suited  to  their  needs  should  be  devoted  to  them. 
Transportation,  here  including  not  only  passenger  but  goods 
transportation,  must  be  planned  to  serve  them  primarily.  But, 
though  they  are  considered  first,  they  cannot  be  considered  ex- 
clusively; the  satisfying  of  their  needs  may  have  to  be  modi- 
fied if  it  takes  too  much  from  satisfying  the  living  needs  of 
those  for  whose  benefit  business  and  industry  exist. 

The  living  needs  of  the  people  may  come  second  in  order  of 
consideraion,  but  not  in  importance.  These  living  needs  funda- 
mentally are  first,  a  wholesome  environment,  which  means  not 
only  a  sanitary  dwelling — to  that"  point  we  have  already  pro- 
gressed in  some  of  our  cities — but  space  for  outdoor  life,  op- 
portunitj'  for  education  and  recreation,  amenities  that  promoted 
sense  of  community  well-being  and  second,  accessibility  to  the 
places  of  employment  which  support  all  this.  That  is,  our 
places  of  employment  must  be  distributed  in  such  a  way  that 
their  business  needs  may  be  most  economically  met  and  at  the 
same  time  that  they  may  be  accessible  to  those  who  operate 
them. 

Philadelphia,  by  happenstance,  for  it  was  only  a  matter  of 
happening,  not  of  conscious  planning,  illustrates  in  a  rough  and 
unordered  way  what  in  the  future  we  shall  do  in  a  systematic 
way.  Its  industries  are  distributed  in  many  centers  and  as  a 
consequence  its  workers  in  unusually  large  proportion  can  live 
within  walking  distance  of  their  work.  As  further  consequences 
its  workers  in  very  unusually  large  proportion  live  in  single 
family  houses,  and  its  transportation  system  has  lagged  behmd 
those  of  competitor  cities  in  mechanical  development.  Had 
Philadelphia,  instead  of  drifting  along  from  a  fortuitously  good 
start,  been  consciously  planned  and  developed  according  to  ideas 


34-'  SELECTED   ARTICLES 

only  now  coming  into  vogue,  it  would  today  be  a  model  for 
other  cities  to  imitate.  The  fundamentals  are  there,  though  long 
unrecognized;  the  failure  has  come  in  working  out  details.  Now 
that  the  fundamentals  are  being  recognized,  though  not  always 
clearly,  and  now  that  the  tide  is  running  strong  toward  com- 
munity development  and  control,  Philadelphia  has  the  best  op- 
portunity of  any  of  our  largest  cities  to  develop  its  housing  and 
its  transportation  in  such  a  way  as  to  attract  labor  and  to  reduce 
labor  turnover. 

In  its  new  and  rapidly  growing  industrial  areas  outside  the 
present  city  it  can  develop  a  transportation  system  designed  to 
meet  real  needs,  not  those  due  to  mal-adjustment,  and  conse- 
quently a  productive  system,  not  a  wasteful  one.  In  these  areas 
there  is  still  space  to  develop  the  kind  of  housing  that  will  make 
the  worker  glad  to  come  and  loath  to  leave.  And  while  it  is 
doing  this  it  may,  if  the  tide  runs  strong  enough  or  if  its  lead- 
ing citizens  swim  hard  enough,  gradually  correct  the  worst 
faults  of  its  present  housing-land  overcrow'ding  and  insanitary 
conditions,  and  modify  its  plans  for  transportation  so  that  they 
will  not  only  bring  it  increased  business  from  outside,  but  will 
make  passenger  transit  within  its  borders  efficient  and  econom- 
ical— high-speed  trunk  lines  connecting  important  centers  and 
fed  by  less  expensive  local  lines.  For  passenger  transportation 
within  a  city  should  be  only  for  those  who  must  travel  long 
distances,  and  the  number  who  must  travel  long  distances  daily 
should  be  reduced  to  a  minimum  by  building  as  large  a  propor- 
tion as  possible  of  houses  within  walking  distance  ol  places  of 
employment. 


LABOR'S  ATTITUDE  ON  HOUSING' 

Great  progress  has  been  made  in  recent  years  in  promoting 
safety  and  sanitation  in  manufacturing,  mining,  and  transpor- 
tation. The  progress  has  been  most  rapid  in  .'safeguarding  work- 
ers from  industrial  accidents.  This  progress  has  been  the  result 
of  continual  agitation  and  education  but  has  proceeded  most 
rapidly  and  satisfactorily  since  the  enactment  of  the  Workmen's 
Compensation  Laws,  which  render  unsafe  working  conditions 
expensive  to  the  employer. 

*  By  Matthew  Woll,  Vice-Pres.  American  Federation  of  Labor.  From 
an  address  before  the  Seventh  National  Conferenc  on  Housing,  Boston. 
November  25-27.    1918. 


PROBLEMS    OF   LABOR  343 

Tlie  advance  of  sanitation  in  workshops  has  been  less  rapid. 
The  dangers  from  bad  sanitation  are  not  only  less  obvious,  but 
there  is  no  liability  for  disease  or  death  occurring  as  a  result 
of  improper  sanitation.  Future  progress  in  sanitation  demands 
not  only  cleanliness  and  ventilation  but  consideration  must  like- 
wise be  given  to  occupational  diseases. 

Still  less  progress  has  been  made  in  promoting  safe,  sanitary, 
and  comfortable  houses  for  the  workers.  Little  progress  has 
been  made  in  this  direction  because  there  has  been  a  total  lack 
of  responsibility  and  no  liability  whatever  for  injury  or  ill-health 
caused  to  the  workers  or  their  families.  Until  recent  years  there 
has  been  indeed  little,  if  any,  community  interest  aroused  in 
the  housing  problem  of  the  workers.  Squalor  and  almost  un- 
livable  conditions  are  still  found  in  many  homes  of  the  workers 
whose  compensation  is  inadequate  and  where  the  opportunity  of 
the  worker  to  associate  with  his  fellow  workmen  for  their  in- 
dustrial improvement  is  persistently  and  successfully  denied. 

One  of  the  outstanding  and  most  grievous  features  prevail- 
ing amongst  these  unorganized  workers  is  the  practice  of  hav- 
ing small  children  look  after  themselves  while  their  parents  are 
at  work.  The  homes  of  these  poorer  workers  in  the  main  are 
heated  by  stoves,  making  it  very  easy  for  the  children  to  seri- 
ously burn  themselves  or  start  a  destructive  blaze.  In  many 
cases  these  homes  consist  of  dark,  unsanitary,  pest-ridden  rooms 
and  foodless  kitchens.  There  can  be  no  disagreement  in  the 
conclusion  that  such  housing  and  conditions  of  homes  should 
not  be  permitted  to  exist. 

The  past  provisions  for  the  housing  of  workmen  have  been 
generally  bad,  not  alone  in  the  larger  cities,  but  in  industrial 
communities  of  every  size,  and  in  rural  districts  as  well.  The 
importance  of  good  sanitary  standards  is  becoming  generally 
recognized.  The  growing  demand  for  sanitation  in  the  home, 
as  well  as  in  the  shop,  and  adequate  and  fit  houses  for  the 
workers  to  live  in,  is  the  result  of  years  of  agitation  and  insis- 
tence on  the  part  of  the  organized  workers  of  our  country. 
This  development  is  due  principally  because  of  the  organized 
workers'  demand  for  adequate  wages  and  their  pronouncement 
that  the  well-being  of  the  community  requires  as  good  sanitary 
conditions  for  the  wage  earner  and  his  family  as  for  the  fami- 
lies of  those  of  a  higher  economic  status. 

The  noticeably  increasing  public  demand  for  the  observance 
of  proper  sanitary  standards  in  the  building  of  new  homes  has 


^  SELECT EIJ    ARTlCr.ES 

(li^^'crf^i{'n'e^v'i)fiSi''6P^^'i5'i'6b1ein  and  makes  more  difiicult  its 
jfeiutioii  when  applied  to  the  old  houses  in  the  poorer  districts 
of  our  large  cities  and  industrial  centers.  Houses  in  these  dis- 
tricts ileVe'r  had  sanitary  utilities  and  conveniences.  Because 
th'ey  are  centrally  located  they  are  usually  rented  as  lonp  as  they 
are  at  all  habital)lc  and  not  condemned  by  health  boards.  The 
iWWigi'^iTf'Vbrlcer 'is  hot  So  particular.  The  unorganized  toiler 
tta^  nttle  chbice.'  His  economic  condition  determines  his  mode 
'^^"ii^^  knd'starida'rd  of  habitatioh.  ■  He  can  consider  6nly  prox- 
imfty'tb  his  w-drkshop  without  extra  cost  of  travel  to  and  from 
hii  work.  Long  hours  of  toil  do  not  permit  him  to  live  any 
y^rekt  distance  from  the  shop.  "  .  ' 

"'"'The  owners  of  these  properties  are  wdl"aw£rfe  of  these  dis- 
fitfv^autageous  economic  conditions  of  the  workers,  and  logically 
fgason,  "why  should  vi'e  therefore  remodel  or  refit  the  old  build- 
ifi&s.' ' afi^  loser  that'  iricottle  which  these  improvements  will  en- 
tail?" ''Because  there  iS'hot  the'  sam'e  language  in  use,  among 
these  foreign  wot-kers,  with  a  multiplicity  of  foreign  customs 
and' practices  and  a  lack  of  trade  organization,  many  of  these 
■vVdrkers  are  comparatively  indifferent  and  generally  extremely 
w'teik  against  strong  groups  who  have  financial  interests  in  the 
rfrdpcrtie'^  and  who  do  not  hesitate  to  commercialize  everj-  eco- 
ftcniSK  disadvantage' '6f  these  wpfkers.  The  problem  of  housing 
HrtWse  old  'districts,  is,'' therefore,"  distinctively  the  most  essen- 
^m\  fet 'mbst  difficult  problem  to  solve.  •"j:l">n(    in,, 

"'"The  demand  of  the  wage  earners  is  not  only  for  sanitary  and 
fit  houses  to  live  in,  but  the  workers  are  also  insistent  that  a 
iftlfficicnt  number  of  houses  shall  be  available  so  that  the,v  may 
bef'  freed  from  the  evils  of  high  rents,  over-crowding,  and  con- 
^^.stion.  Such  conditions  of  housing  make  not  only  for  discom- 
£ort  and  unhappiness  but  promote  disease  and  degeneration. 
.^f^The  ordinary  method  of  supplying  houses  throughout  their 
grdction  by  private  capital  for  investment  and  speculation  has 
raWly,  if  ^ver,  been  adequate.  Nearly  all  of  our  cities  are 
bnilt  upon  a  s.vstem  of  exploitation.  Most  houses  built  for  the 
wage  (earners'  are  built  to  sell.  They  are  built  shoddily  and 
ftTily'asf'jtobd  las  they  must  be  in  direct  proportion  to  the  build- 
hl'g;lla<\'^  land  municipal  snpervision.  It  has  not  been  a  question 
off'Milding'  well,  but  of  buildintj  profitably.  I'^sually,  and  quite 
generally,  banking  and  loaning  institutions  are  in  league  with 
t^enywtiet-,^  of  building  projects,  and  later  turn  over  their  joint 
projects  to  other  innocent  persons  to  be   squeezed  by  them   in 


PROBLEMS    01-    LABOR  '^45 

order  that  a  handsome  income  may  be  secured  to  both  interests 
Concerned.  This  system  of  exploitation  does  not  permit  of 
proper  housing  faciHties  and  adequate  upkeep.  It  demands  only 
incomes  and  discourages  expenditures,  thus,  in  a  short  time  the 
houses  become  bad,  until  a  few  years  thereafter  the  Boards  of 
Health  order  the  premises  vacated,  unless  political  prestige  or 
ifidustrial  influence  suffices  to  prevent  the  continuation  of  a  most 
abhorrent  condition  of  housing. 

'  •■'  TlVe  tfeiiement  house  acts,  as  well  as  the  health  ordinances 
awT  building  regulations  of  mtmicipalitics,  while  generallj'  pro- 
ductive of  good  effect,  are  at  best  surface  remedies  and  can 
nev'er  cure  the  evil  of  our  present  housing  situation.  A  careful 
analysis  of  the  results  of  the  private  housing  situation  for  the 
past  twenty-five  years  demonstrates  conclusively  the  inadequacy 
O'fe^Lit'  procedure.  In  "practically  no  instance  have  social  ideals 
ei-'^eeeJtid'mic  justice  been  given  more  than  a  superficial  consider- 
ationV  In  small  manufacturing  communities  the  number  of  all 
of  the  inhabitants  owning  their  own  horties  is  less  than  15%. 
With  this  percentage  in  small  manufacturing  centers  what  may 
■we  expect  in  larger  manufacturing  cities  where  land  and  build- 
}H»t«(3sts  arc  much  higher. 

-'■^'LA- furthei"  study  leads  to  the  remarkable  finding  that  a  very 
large  proportion  of  homes  owned  by  these  workers  are  en- 
Cilmbered  with  kmg-tim'e  obligations  which  tend  to  keep  the 
operatives  in  a  state  of  complete  dependency,  making  it  easy 
to  repress  their  economic  rights  and  force  them  involuntarily 
to  become  mere  cogs'  in  the  adjacent  factory  organization. 
Under  these  conditions  the  wage  earner  is  less  likely  to  strike 
or  leave  his  employment  in  order  to  retain  his  immediate, 
ihuugh  meager  saving  and  investment.  He  is  led  often  to  for- 
feit his>  dpportunity  for  futiire  improvement  by  forfeiting  his 
right  of  association  and  of  collective  bargaining.  -^■■ 

Excellent  plans  for  the  housing  of  workmen  have  been  put 
into  effect  by  a  number  of  firms  and  corporations,  but  such 
measure?  have  little,  if  at  all,  affected  the  general  situation.  On 
the  contrary,  the  employers'  interests  are  primarily  in  the  eco- 
nomic advantage  which  a  closer  labor  supply  affords.  Indeed 
the  early  and  still  existing  practice  in  some  localities  of  factory- 
owned  dwellings  was,  and  is  yet,  an  immense  advantage  to  em- 
ployers in  times  of  strikes  and  other  labor  disturbances  when 
the'powet-  of  eviction  can  be  invoked,  or  at  least  threatened  to 
good  advantage  in  the  employer's  behalf. 


346  SELECTED  ARTICLES 

Aside  from  the  well-to-do  manufacturer  or  corporation  en- 
gaging in  the  present  system  of  housing  the  workers,  we  have 
also  the  speculator  in  real  estate  to  consider.  While  the  im- 
provement and  social  welfare  of  the  wage  earner  have  been  of 
secondary  importance  to  employers,  the  welfare  of  the  wage 
earner  and  an  improved  community  spirit  are  totally  lacking 
in  the  motives  which  prompt  the  real  estate  speculator.  He  is 
invariably  prompted  by  selfish  interests  and  has  scarcely  ever 
been  concerned  beyond  the  immediate  prospects  of  profit.  As 
a  matter  of  fact  he  has  been  confined  mainly  to  the  limited  num- 
ber of  better  paid  workmen  because  he  has  found  that  the  ex- 
ploiting of  low  and  under-paid  wage  earners  is  not  a  profitable 
field  for  him. 

It  may  be  well  asked  if  the  low  and  under-paid  employees 
in  factories  are  being  housed  at  all,  or  if  they  are  only  boarding, 
rooming,  or  crowding.  It  is  difficult  to  conceive  how  the  worker 
with  a  very  low  income  and  large  family  can  rent  habitable 
houses,  much  less  approximate  those  sanitary  utilities  which  our 
present  knowledge  of  health  demands.  It  might,  therefore,  be 
apparent  that  our  present  practices  and  policies— or  lack  of  poli- 
cies—for improved  housing  of  the  workers  have  been  unjust 
and  due  principally  to  disastrous  economic  conditions  of  the 
workers. 

The  solution  of  the  problem  first  of  all  demands  that  every 
wage  earner  shall  be  afforded  the  opportunity  of  employment 
and  an  income  and  sustenance  to  enable  him,  without  the  labor 
of  mother  and  children,  to  maintain  himself  and  family  in  health 
and  comfort  and  to  provide  a  competence  for  old  age  with  ample 
provision  for  recreation  and  good  citizenship. 

To  attain  this  condition  the  worker  must  be  guaranteed  and 
encouraged  in  the  exercise  of  his  right  to  organize  and  associ- 
ate with  his  fellow  workmen  in  trade  unions  and  to  deal  col- 
lectively with  employers  through  such  representatives  of  their 
unions  as  they  may  choose,  for  their  improved  economic  and 
industrial  conditions  and  relations. 

Realizing  that  ownership  of  a  home,  free  from  the  grasp  of 
exploiting  and  speculative  interest,  will  make  for  a  more  effi- 
cient worker,  a  more  contented  and  happy  family,  and  a  better 
citizen,  the  Government  should  interest  itself  in  the  following 
program : 

a.    Prepare  and  inaugurate  a  plan  to  build  model  homes 
for  the  wage  earners. 


PROBLEMS  OF  LABOR  347 

b.  Establish  a  system  of  credits  whereby  the  workers 
may  borrow  money  for  a  long  term  of  years  at  a  low 
rate  of  interest  to  build  their  own  homes. 

c.  Encourage,  protect,  and  extend  credit  to  voluntary, 
non-profit  making  housing  and  joint-tenancy  associa- 
tions. 

d.  Exempt  from,  taxation  and  grant  other  subsidies  for 
houses  constructed  for  occupancy  of  their  owners. 

e.  Relieve  municipalities  from  the  restrictions  prevent- 
ing them  from  undertaking  proper  housing  plans  and 
engaging  in  other  necessary  enterprises  relating  to  the 
workers'  welfare  and  fitting  habitation. 

/.     Encourage  and  support  the  erection  and  maintenance 

.  of  houses   where   the   workers   may  find   lodging  and 

nourishing  food  during  the  periods  of  unemployment. 

We  should  no  longer  hesitate  in  forcing  unused  lands  into 
use  by  exempting  all  improvements  from  taxation  and  by  plac- 
ing a  tax  on  non-productive  the  same  as  on  productive  land. 

Legislation  should  therefore  be  devised  for  the  purpose  of 
preventing  the  holding  of  land  out  of  use  and  to  secure  for  the 
Government,  if  not  all,  at  least  a  part  of  the  unearned  incre- 
ment of  land. 

In  dealing  with  this  question  individually,  the  existing  con- 
ditions present  problems  which  seem  almost  hopeless  of  solu- 
tion, but  we  are  fast  getting  beyond  the  individual  point  of  view 
to  the  development  of  collective  planning  and  rebuilding.  In 
that  development  alone  lies  our  main  hope. 

There  is  developing  very  rapidly  a  public  demand  that  every 
worker  shall  be  provided  with  a  decent,  fitting,  sanitary,  and 
comfortable  home.  The  wage  earners  of  America  are  deserv- 
ing of  this  new  conception  of  life  and  living  and  are  entitled  to 
no  less. 

This,  then,  is  the  inspiration,  the  motive,  and  one  of  the 
ultimate  objects  of  the  American  Federation  of  Labor. 


■O'An 


,V1B3ii:  bllOiK'.) 


.«i3nwo    i:  ill 
bna  <>iislq  ; 

otn't  ?.; 


ifJiw  jjni 

v/aiv  i 
nT 

bns  ,v 

T.f)    }o   •>(!(>   bar,      ,tj 


ri:iM]T'AL  (\?\'ry.\.v-V'i 


loi  bi.o..METHODS  OF   PROMOTING 
^J  ^;^  ;',       INDUSTRIAL   PEACE 

'      '■    'f^E  PRESIDENT'S  INDUSTRIAL 
'         '  CONFERENCE^ 

Labor  Proposals 
Secretary  Wilson's  Plan 

Resolution  offered  by  the  secretary  of  labor,  William  IV. 
If^ilson,  October  g,  based  to  a  degree  upon  the  zvorking  scheme 
of  the  ll'ar  Labor  Policies  Board. 

Re'solved,  that  there  shall  be  created  a  board  of  equal  number 
of  employers  and  employees  in  each  of  the  principal  industries 
and  a  board  to  deal  with  miscellaneous  industries  not  having  a 
separate  board.  The  representatives  of  labor  on  such  boards 
shall  be  selected  in  such  manner  as  the  workmen  in  the  industry 
may  determine.  The  representatives  of  the  employers  shall  be 
selected  in  such  manner  as  the  employers  in  the  industry  may 
determine. 

\Vhenevcr  any  dispute  arises  in  any  plant  or  series  of  plants 
that  cannot  be  adjusted  locally  the  question  or  questions  in 
dispute  shall  be  referred  to  the  board  created  for  that  industry 
for  adjustment.  The  board  shall  also  take  jurisdiction  when- 
ever in  the  judgment  of  one-half  of  its  members  a  strike  or 
lockout  is  imminent.  Decisions  of  the  board  on  questions  of 
Wdges,  hours  of  labor,  or  working  conditions  must  be  arrived 
at  by  unanimous  vote.  If  the  board  shall  fail  to  come  to  a 
unanimous  determination  of  any  such  question,  the  question 
in  dispute  shall  be  referred  to  a  general  board  appointed  by  the 
•Pi'esident  of  the  United  States  in  the  following  manner: 
':•  One-third  of  the  number  to  be  appointed  in  agreement  with 
the  organization  or  organizations  of  employers  most  representa- 

1  The  President  of  the  United  States,  in  October  1919  called  a  con- 
ference of  interests  representing  labor,  capital  and  the  public  to  arrive 
at  some  method  of  eliminating  industrial  unrest.  The  -conference  liroke 
up  on  the  question  of  collective  bargaining.  The  proposals  offered  are 
important    as    indicating   the    points    of    view    they    represent. — Ed. 


350  SELECTED  ARTICLES 

live  of  employers;  one-tliird  of  Ihc  number  to  be  appointed  in 
agreement  with  the  organization  or  organizations  of  labor  most 
representative  of  labor,  one-third  of  the  number  to  be  appointed 
by  the  President  direct. 

Any  question  in  dispute  submitted  to  the  general  board  for 
adjudication  shall  be  decided  by  the  unanimous  vote  of  the 
board.  If  the  general  board  fails  to  arrive  at  a  decision  by 
unanimous  vote,  the  question  or  questions  at  issue  shall  be  sub- 
mitted to  an  umpire  for  determination.  The  umpire  shall  be 
selected  by  one  of  the  two  following  processes :  First,  by  unani- 
mous selection  of  the  general  board.  Failing  of  such  selection, 
then  the  umpire  shall  be  drawn  by  lot  from  a  standing  list  of 
twenty  persons  named  by  the  President  of  the  United  States  as 
competent  umpires  in  labor  disputes. 

In  all  disputes  that  may  be  pending  locally,  or  before  the  in- 
dustrial board,  or  before  the  general  board,  or  before  the  um- 
pire, the  employers  and  employes  shall  each  have  the  right  to 
select  counsel  of  their  own  choice  to  represent  them  in  present- 
ing the  matter  in  controversy'. 

Whenever  an  agreement  is  reached  locally,  or  by  the  unani- 
mous vote  of  the  industrial  board,  or  by  the  decision  of  the  um- 
pire, the  conclusion  arrived  at  shall  have  all  the  force  and  effect 
of  a  trade  agreement  which  employers  and  employes  shall  be 
morally  bound  to  accept  and  abide  by. 

It  is  understood  that  this  plan  would  not  interfere  with  any 
system  of  joint  wage  conference  now  in  existence,  unless  or 
until  the  failure  to  agree  in  such  a  conference  made  a  strike  or 
lockout  imminent. 

The  a.  F.  of  L.  Platform 

Resolution  offered  by  Samuel  Gompers,  president  of  the 
A.  F.  of  L.,  ivith  the  assent  of  the  labor  group  of  which  he  is 
chairvian. 

Resolved,  this  conference  of  representatives  of  the  public,  of 
the  employers  and  business  men  and  of  labor,  called  by  the 
President  of  the  United  States,  hereby  declares  in  favor  of  the 
following : 

I.  The  right  of  wage-earners  to  organize  in  trade  and  labor 
unions  for  the  protection  and  promotion  of  their  rights,  inter- 
ests and  welfare. 


PROBLEMS   OF   LABOR  35i 

2.  The  right  of  wage-earners  to  bargain  collectively  through 
trade  and  labor  unions  with  employers  regarding  wages,  hours 
of  labor,  and  relations  and  conditions  of  employment. 

3.  The  right  of  wage-earners  to  be  represented  by  repre- 
sentatives of  their  own  choosing  in  negotiations  and  adjustments 
with  employer  in  respect  to  wages,  hours  of  labor,  and  relations 
and  conditions  of  employment. 

4.  The  right  of  freedom  of  speech  of  the  press  and  of  as- 
semblage, all  being  responsible  for  their  utterances  and  actions. 

5.  The  right  of  employers  to  organize  into  associations  or 
groups  to  bargain  collectively  through  their  chosen  representa- 
tives in  respect  to  wages,  hours  of  labor,  and  relations  and  con- 
ditions of  employment. 

6.  The  hours  of  labor  should  not  exceed  eight  hours  per 
day.  One  day  of  rest  in  each  week  should  be  observed,  pre- 
ferably Sunday.  Half-holiday  on  Saturday  should  be  en- 
couraged. 

Overtime  beyond  the  established  hours  of  labor  should  be 
discouraged,  but  when  absolutely  necessary  should  be  paid  for 
at  a  rate  not  less  than  time  and  one  half  time. 

7.  The  right  of  all  wage-earners,  skilled  and  unskilled,  to 
a  living  wage  is  hereby  declared,  which  minimum  wage  shall 
insure  the  workers  and  their  families  to  live  in  health  and  com- 
fort in  accord  with  the  concepts  and  standards  of  American  life. 

8.  Women  should  receive  the  same  pay  as  men  for  equal 
work  performed. 

Women  workers  should  not  be  permitted  to  perform  tasks 
disproportionate  to  their  physical  strength  or  which  tend  to  im- 
pair their  potential  motherhood  and  prevent  the  continuation  of 
a  nation  of  strong,  healthy,  sturdy  and  intelligent  men  and  wo- 
men. 

0.  The  services  of  children  less  than  sixteen  years  of  age 
for  private  gain  should  be  prohibited. 

ID.  To  secure  a  greater  share  of  consideration  and  coopera- 
tion to  the  workers  in  all  matters  affecting  the  industry  in  which 
they  are  engaged,  to  secure  and  assure  continuously  improved 
industrial  relations  between  employers  and  workers  and  to  safe- 
guard the  rights  and  principles  hereinbefore  declared,  as  well 
as  to  advance  conditions  generally,  a  method  should  be  pro- 
vided for  the  systematic  review  of  industrial  relations  and  con- 
ditions by  those  directly  concerned  in  each  industry. 


352  SELECTED   ARTICLES 

> w,;»   ,f..  ,M-,.fi  The  Den NisoN  Resolutions 

Resolutions  offered  by  Henry  S.  pennison,  president  of  the 
Dcnnison  Mamifaci tiring  Co.,  Framingham,^  Mass.,  with  the  as- 
sent  of  the  piihlic  group  of  zvhich   he  is  a  member. 

Collective  Bargaining 

Whereas  a  serious  inequality  of  ^rg^iqing  .power  between 
employers  and  employes  alwaj's  imperils  industrial  peace, 

And  whereas  equality  of  bargaining  power  requires  both 
the  right  of  collective  bargaining  upon  the  part  of  the  employes 
and  the  right  of  tjhe  employers  to  deal  directly  v.ith  their  em- 
ployes, 

Now,  therefore,  be  it  resolved  that  it  is  the  opinion  of  this 
conference  that  (i)  Employers  should  at  all  times  recognize 
the  right  of  their  ^  employes  independently  to  organize  for  the 
purpose  of  collective  bargaining  and  should  always  jbe  ready 
to  meet  any  groups  of  their  cmploj'es  either.direcltly-er  tiifbugh 
its    representatives,    and  '  :   '      ' 

(2)     Labor  should  recognize^  the  riglit- of  tlic  employers  to 
deal   with   their  employes   directly,   through   freely  elected    shop 
Committees  or  othei-wise,  as  well  as  through  trade  unions. 
-'"o>  bar,  rfltror!  tv  ovif  ot  ^^W\"u^[   ihi^]  hnR  ?n::>liov^  r 
.,^j|  ,,f;  ;         '    -       ■ '  Shop  Committees    '-    '•■■•  i^-'-- 

''•"flleiSolved,  whereas  maximum  production  is  only  possible  if 
the  full  interest  of  the  workman  is  enlisted  in  his  work,  and 
'  ■'  Whereas  a  sound  social  policy  d,emaji4s  that  work  shall  Ije 

d6h6''un(le'r  'conclitions''whi(;fT    promote! the   seJf-respect   p.f  -the 

*!  -.       .;*.-.,,.'».,,       , ■  r         •    ■  ■  -  '    lift'    i):"\i  t ;  t*"* n  li'i r'"   I r. * t'imT' ^ ^   "^ '  ■  r  ■       . . 
workman    and    afford    him    a  sense  "o5wWortnwhile  -accomplish- 

ment  in  his  work. 

Now  therefore  be  it  resolved, ,thcU. it, is  the  opinion  oi  tlic 
conference  that  the  employers  :Hn4-ei»Ployss.iu  every  iactory 
shoi^ld  unite  in  bri4>ging  .about.^b?  4j^y^l(0piiPG^V  of  eotnmittces 
freely  elected,  by.  the  employes  (whether  as  a  part  of  tlie  trade 
luniou  system  or  otherwise,  Init  not-  in  antagonism  to  trade 
unionism)  for  the  joint  consideration  by  these  committees  and 
the  employers  of  such  constructive  matter's  as  methods  of  en- 
listing'w'orkets' (interest,  and  of  ■  impnovmg  effideft'cy'  bf'pi'o- 
ductievnv  whidt-.tbne'off.'miltaalf'va'kievm  efftpfe^-'^fs  a'fid  ■fe'mpVoycs. 

.•it;.nbai  il-.fir*  ni  b-'m'>  -no"*  ylto-nlb  ->pn,{l  vJ  ?rf.->:td. 


PROBLEMS    OF   LABOl  353 

The  Employer's   Plati-oum 

Statement  of  principles  which  should  govern  the  employment 
relation  in  industry,  as  subviitied  by  the  employer  group  to  the 
industrial  conference. 

Sound  industrial  development  must  have  as  its  foundation 
productive  efficiency,  and  high  productive  efficiency  requires  not 
only  energy,  loyalty  and  intelligence  on  the  part  of  management 
and  men  but  sincere  cooperation  in  the  employment  relation 
based  upon  mutual  confidence  and  sympathy. 

This  is  true  of  all  producing  industries,  large  and  small,  of 
the  farming  industry  as  well  as  the  manufacturing.  While  there 
are  differences  between  the  different  branches  of  industry  which 
call  for  special  application  of  the  underlying  principles,  these 
principles  are  the  same  in  all. 

Without  efficienc}'  in  production,  that  is  to  say,  without  a 
large  product  economically  produced,  there  will  be  no  fund  for 
the  payment  of  adequate  compensation  for  labor,  management 
and  capital,  and  high  cost  of  living  will  inevitably  continue. 
Moreover,  without  such  efficiency  it  will  be  impossible  for  Amer- 
ican industr}^  successful!)'  to  compete  in  foreign  markets  or  with 
foreign  competition  in  this  country.  The  larger  and  more 
effective  the  production,  the  greater  will  be  the  return  to  all  en- 
gaged in  the  industry,  and  the  lower  the  cost  of  living. 

The  requisite  efficiency  in  production  can  not  be  secured  un- 
less there  is  effective  cooperation  between  emploj-er  and  employe 
such  as  is  only  possible  where,  with  a  full  understanding  of  each 
other's  point  of  view,  management  and  men  meet  upon  a  com- 
mon ground  of  principle  imd  in  a  spirit  of  cooperation  based 
upon  good  understanding  and  a  recognition  of  what  is  fair  and 
right  between  the  two.  Then  only  can  there  be  that  harmony 
which  will  insure  the  prosperity  of  those  engaged  in  industry 
and  of  all  the  people. 

With  full  recognition  of  the  vital  importance  of  these  condi- 
tions and  with  due  realization  of  the  great  responsibility  rest- 
ing upon  management  to  secure  their  practical  application  in 
industrial  affairs,  we  submit  the  following  which  we  regard  as 
fundamentally  sound  in  the  interest  of  industry,  of  those  em- 
ployed or  concerned  in  industry,  and  of  the  people  as  a  whole. 

I.  Production.  The  industrial  organization  as  a  productive 
agency  is  an  association  of  management,  capital  and  labor,  vol- 
untarily established   for  economic  production    through   coopera- 


354  SELECTED   ARTICLES 

tive  effort.  It  is  the  function  of  management  to  coordinate  and 
direct  capital  and  labor  for  the  joint  benefit  of  all  parties  con- 
cerned and  in  the  interest  of  the  consumer  and  of  the  com- 
munity. No  employment  relation  can  be  satisfactory  or  fulfill 
its  functions  for  the  common  good,  which  does  not  encourage 
and  require  management  and  men  to  recognize  a  joint  as  well 
as  an  individual  obligation  to  improve  and  increase  the  (luantity 
and  quality  of  production  to  as  great  an  extent  as  possible, 
consistent  with  the  health  and  well-being  of  the  workers. 

There  should  be  no  intentional  restriction  of  productive  ef- 
fort or  output  by  either  the  employer  or  the  employe  to  create 
an  artificial  scarcity  of  the  product  or  of  labor  in  order  to  in- 
crease prices  or  wages;  nor  should  there  be  any  waste  of  the 
productive  capacity  of  industry  through  the  employment  of  un- 
necessary labor  or  inefficient  management. 

It  is  the  duty  of  management  on  the  farms  and  in  industry 
and  commerce,  as  far  as  possible,  to  procure  the  capital  neces- 
sary for  the  increased  production  that  is  required,  and  of  both 
management  and  labor  to  cooperate  to  promote  the  use  of  cap- 
ital in  the  most  efficient  fashion. 

2.  The  Establishment  as  a  Productive  Unit.  Recognizing 
tlie  cooperative  relationship  between  management  and  men  es- 
sential to  productive  efficiency  as  a  pre-requisite  for  national  and 
individual  well-being,  the  establishment  rather  than  the  industry 
as  a  whole  or  any  branch  of  it  should,  as  far  as  practicable,  be 
considered  as  the  unit  of  production  and  of  mutual  interest  on 
the  part  of  the  employer  and  the  employe.  Here  by  experi- 
mentation and  adaptation  should  be  worked  out  and  set  up 
satisfactory  means  for  cooperative'  relations  in  the  operation  of 
the  establishment,  with  due  regard  to  local  factors. 

Each  establishment  should  develop  contact  and  full  oppor- 
tunity for  interchange  of  view  between  men  and  management 
through  individual  or  collective  dealing  or  a  combination  of 
both,  or  by  some  other  effective  method,  always  predicated  on 
both  sides  on  honesty  of  purpose,  fairness  of  attitude  and  due 
recognition  of  the  joint  interest  and  obligation  in  the  common 
enterprise  in  which  they  are  engaged.  Machinery  is  not  enough 
for  this  purpose.  There  must  also  be  sympathy  and  good  will, 
with  earnest  intent  that  whatever  the  means  employed  they  must 
be  effective. 

3.     Conditions  of   JVnrk.     It  is  the  duty  of   management   to 


PROBLEMS   OF   LABOR  355 

make  certain  that  the  conditions  under  which  work  is  carried 
on  are  as  safe  and  as  satisfactory  to  the  workers  as  the  nature 
of  the  business  reasonably  permits.  Every  effort  should  be 
made  to  maintain  steady  employment  of  the  workers  both  on 
their  account  and  to  increase  efficiency.  Each  establishment 
should  study  carefully  the  causes  of  unemployment,  and  indi- 
vidually and  in  cooperation  with  other  establishments  in  the 
same  and  other  industries  should  endeavor  to  determine  and 
to  maintain  conditions  and  business  methods  which  will  result 
in  the  greatest  possible  stability  in  the  employment  relation. 

4.  IVagcs.  While  the  law  of  supply  and  demand  must  in- 
evitably play  a  large  part  in  determining  the  wages  in  any  in- 
dustry or  in  any  establishment  at  any  particular  time,  other  con- 
ditions must  be  taken  into  account,  such  as  the  efficiency  of  the 
worker  and  the  wage  standard  of  the  industry  in  the  locality. 
The  wage  should  be  so  adjusted  as  to  promote  the  maximum 
incentive  consistent  with  health  and  well-being  and  the  full 
exercise  of  individual  skill  and  effort.  Moreover,  the  business  in 
each  establishment  and  generally  in  industry  should  be  so  con- 
ducted that  the  worker  should  receive  a  wage  sufficient  to  main- 
tain him  and  his  family  at  a  standard  of  living  that  should  be 
satisfactory  to  a  right-minded,  man  in  view  of  the  prevailing 
cost  of  living,  which,  should  fairly  recognize  the  quantity  and 
quality  of  his  productive  effort  and  the  value  and  length  of  his 
service,  and  reflect  a  participation  on  his  part  in  the  prosperity 
of  the  enterprise  to  which  he  is  devoting  his  energy-. 

Many  plans  are  now  under  consideration  for  adding  to  the 
fixed  wage  of  the  worker  such,  for  example,  as  bonus  pay- 
ments, profit-sharing  and  stock  ownership.  All  such  plans 
should  be  carefully  studied  in  each  establishment.  It  may  well 
he  that  in  many  instances  the  employer  and  the  emplo5'e  could 
Work  out  an  arrangement  of  such  a  character  to  their  mutual 
advantage. 

In  order  that  the  worker  maj-  in  his  own  and  general  interest 
develop  his  full  earning  capacity  and  command  his  maximum 
wage  it  should  be  a  primary  concern  of  management  to  assist 
him  to  secure  employment  suited  to  his  abilities,  to  furnish  him 
incentive  and  opportunitj-  for  improvement,  to  provide  proper 
safeguards  for  his  health  and  safety,  and  to  aid  him  to  increase 
the  value  of  his  productive  effort. 

\\'here  women  are  doing  work  equal  with  that  of  inen  under 


356  SELECTED   ARTICLES 

the  same  conditions,  they  should  receive  the  same  rates  of  pay 
as  men  and  should  be  accorded  the  same  opportunities  for  train- 
ing and  advancement. 

5.  Hours  of  Work.  Hours  of  work  schedules  should  be 
fixed  at  the  point  consistent  with  the  health  of  the  worker  and 
his  right  to  an  adequate  period  of  leisure  for  rest,  recreation, 
home  life  and  self-development.  To  the  extent  that  the  work 
schedule  is  shortened  beyond  this  point  the  worker  as  well  as 
the  community  must  inevitably  pay  in  the  form  of  a  reduced 
standard  of  living. 

The  standard  of  the  work  schedule  should  be  the  week,  varj'- 
ing  as  the  peculiar  requirements  of  individual  industries  may 
demand.  Overtime  work  should,  as  far  as  possible,  be  avoided, 
and  one  day  of  rest  in  seven  should  be  provided. 

6.  Settlement  of  Disputes.  Each  establishment  should  pro- 
vide adequate  means  for  the  discussion  of  all  questions  and  the 
just  and  prompt  settlement  of  all  disputes  that  arise  between 
management  and  men  in  the  course  of  industrial  operation,  but 
there  should  be  no  improper  limitation  or  impairment  of  the 
exercise  by  management  of  its  essential  function  of  judgment 
and  direction. 

7.  Right  to  Associate.  All  men  have  the  right  to  associate 
voluntarily  for  the  accomplishment  of  lawful  purposes  by  lawful 
means.  The  association  of  men,  whether  of  employers,  employes 
or  others,  for  collective  action  or  dealing  confers  no  authority 
and  involves  no  right  of  compulsion  over  those  who  do  not 
desire  to  act  or  deal  with  them  as  an  association.  The  arbitrary 
use  of  such  collective  power  to  coerce  or  control  others  without 
their  consent  is  an  infringement  of  personal  liberty  and  a 
menace  to  the  institutions  of  a  free  people. 

8.  Responsibility  of  Associations.  The  public  saiely  re- 
quires that  there  shall  be  no  exercise  of  power  without  cor- 
responding responsibility.  Every  association,  whether  of  em- 
ployers or  employes,  must  be  equally  subject  to  public  authority 
and  legally  answerable  for  its  own  conduct  or  that  of  its  agents. 

9.  Freedom  of  Contract.  With  the  right  to  associate  recog- 
nized, the  fundamental  principle  of  individual  freedom  demands 
that  every  person  must  be  free  to  engage  in  any  lawful  occupa- 
tion or  enter  into  any  lawful  contract  as  an  employer  or  an  em- 
ploye, and  be  secure  in  the  continuity  and  rewards  of  his  effort. 
The  only  qualification  to  which  such  liberty  of  contract  is  sub- 
ject lies  in  the  power  of  the  state,  within  limits  imposed  by  the 


PROBLEMS   OF   LABOR  357 

Constitution,  to  regulate  in  the  public  interest,  for  example,  for 
the  promotion  of  health,  safety  and  morals. 

10.  The  Open  Shop.  The  principles  of  individual  liberty 
and  freedom  of  contract  upon  which  our  institutions  are  fun- 
damentally based  require  that  there  should  be  no  interference 
with  the  "open  shop,"  that  is,  the  shop  in  which  membership 
or  non-membership  in  any  association  is  not  made  a  condition 
of  employment.  While  fair  argument  and  persuasion  are  per- 
missable,  coercive  methods  aimed  at  turning  the  "open  shop" 
into  a  "closed  union"  or  "closed  non-union  shop,"  should  not  be 
tolerated. 

There  should  be  no  denial  of  the  right  of  an  employer  and 
his  workers  voluntarilj'  to  agree  that  their  relation  shall  be  that 
of  the  "closed  union  shop"  or  of  the  "closed  non-union  shop." 
But  the  right  of  the  employer  and  his  men  to  continue  their  rela- 
tions on  the  principle  of  "open  shop"  should  not  be  denied  or 
questioned.  No  employer  should  be  required  to  deal  with  meii 
or  groups  of  men  who  are  not  his  employes  or  chosen  by  and 
from  among  them. 

Under  the  organization  of  the  "open  shop"  there  is  not  the 
same  opportunity  for  outside  interference  on  the  part  of  other 
interests  to  prevent  close  and  harmonious  relations  between  em- 
plo}-er  and  emploj^e.  Their  efforts  to  continue  or  secure  such 
harmonious  relationship  are  not  complicated  to  the  same  extent 
by  intervention  of  an  outside  interest  which  maj-  have  aspira- 
tions and  plans  of  its  own  to  promote,  which  are  not  necessarily 
consistent  with  good  relations  in  the  shop. 

11.  The  Right  to  Strike  or  Lockout.  In  the  statement  of 
the  principle  that  should  govern  as  to  the  right  to  strike  or 
lockout,  a  sharp  distinction  should  be  drawn  between  the  em- 
ployment relations  in  the  field  (a)  of  the  private  industry;  (b) 
of  the  public  utility  service;  and  (c)  of  government  employ- 
ment, federal,  state  or  municipal.  In  all  three  there  are  com- 
mon rights  and  obligations  but,  insofar  as  the  right  to  strike  or 
lockout  is  concerned,  the  nature  of  the  government  service  and 
public  utility  operations  requires  that  they  should  be  considered 
from  a  somewhat  different  point  of  view  than  private  industry. 

In  private  industry  the  strike  or  the  lockout  is  to  be  de- 
plored; but  the  right  to  strike  or  lockout  should  not  be  denied 
as  an  ultimate  resort  after  all  possible  means  of  adjustment 
have  been  exhausted.  Both  employers  and  employes  should 
recognize  the  seriousness  of  such  action  and  should  be  held  to 


358  SELECTED   ARTICEES 

a  high  responsibility  for  the  same.  The  statement  that  the  right 
to  strike  or  lockout  should  not  be  denied  docs  not  cover  the 
matter  of  the  sympathetic  strike  or  lockout,  where  for  mere 
purposes  of  coercion  there  is  a  combination  deliberately  inflicting 
injury  upon  parties  against  whom  the  assailants  have  no  griev- 
ance for  the  purpose  of  accomplishing  an  ulterior  result.  The 
sympathetic  strike  is  indefensible,  anti-social  and  immoral.  The 
same  may  be  said  of  the  Ijlacklist,  the  boycott,  and  also  of  the 
sympathetic  lockout. 

In  public  utility  service  the  public  interest  and  welfare  must 
be  the  paramount  and  controlling  consideration.  Modern  social 
life  demands  the  uninterrupted  and  unimpaired  operation  of 
such  service,  upon  which  individuals  and  communities  arc  as 
dependent  as  is  human  life  on  the  uninterrupted  circulation  of 
the  blood.  The  state  should,  therefore,  impose  such  regulations 
as  will  assure  continuous  operation,  at  the  same  time  providing 
adequate  means  for  the  prompt  hearing  and  adjustment  of  com- 
plaints and  disputes. 

In  government  employment  the  orderly  and  continuous  ad- 
ministration of  governmental  activities  is  imperative.  A  strike 
of  government  employes  is  an  attempt  to  prevent  the  operation 
of  government  until  the  demands  of  such  employes  are  granted, 
and  cannot  be  tolerated.  No  public  servant  can  obey  two 
masters ;  he  cannot  divide  his  allegiance  between  the  govern- 
ment which  he  serves  and  a  private  organization  which,  under 
any  circumstances,  might  obligate  him  to  suspend  his  duties,  or 
agrees  to  assist  him  morally  or  financially  if  he  does.  Social 
self-defense  demands  that  no  combination  to  prevent  the  opera- 
tion of  government  be  permitted.  The  right  of  government  em- 
ployes to  be  heard  and  to  secure  just  redress  should  be  amply 
safeguarded. 

12.  Training.  Practical  plans  should  be  inaugurated  in  in- 
dustry and  outside  of  it  for  the  training  and  upgrading  of  in- 
dustrial workers,  their  proper  placement  in  industry,  the  adop- 
tion and  adaptation  of  apprenticeship  systems;  the  extension  of 
vocational  education  and  such  other  adjustments  of  our  educa- 
tional system  to  the  needs  of  industry  as  will  prepare  the  worker 
for  more  effective  and  profitable  service  to  society  and  to  him- 
self. 

The  foregoing  is  limited  to  a  statement  of  principles.  Only 
casual  reference  has  been  made  to  methods  by  which  such  prin- 
ciples may  be'  carried  into  effect.     The  problems  are  so  serious 


PROBLEMS    OF   LABOR  359 

and  difficult  that  such  methods  must  be  worked  out  by  the  in- 
dividual establishments  in  conjunction  with  their  employes  and 
by  industry  as  a  whole. 


TRADE-UNION   SOLUTION  OF  THE  CLASH 
OF  RIGHTS' 

The  capital  group  in  the  industrial  conference  has  put  forth, 
in  a  verbal  knot  and  tangle,  an  illogical  and  self-contradictory 
half  statement  of  the  abstract,  legal  and  conditional  rights  of 
employers  and  wage-earners  to  be  recognized  in  making  labor 
contracts.  In  reply,  it  is  necessary  to  bring  clearly  to  mind  cer- 
tain distinctions  as  to  human  rights  and  to  recognize  which  of 
them  are  subject  to  modifications  and  in  what  circumstances. 

The  abstract  rights  of  individuals  are  not  absolute  and  in- 
variable. In  the  abstract,  the  state  guarantees  to  its  citizens  the 
rights  of  life,  liberty  and  property.  But  in  the  concrete,  the 
state  itself  subjects  these  rights  to  various  qualifications,  reach- 
ing in  extreme  instances  to  entire  negation.  It  abolishes  the 
natural  right  to  life  in  the  case  of  murderers,  traitors  and  violent 
resisters  of  the  law.  It  continually  deprives  tens  of  thousands 
of  criminals  of  their  liberty.  It  quarantines  persons  in  health 
to  prevent  by  their  freedom  of  movement  the  possible  spread  of 
contagion.  It  prohibits  women  and  children  from  exercising  the 
liberty  of  working  when,  where  and  as  they  please.  It  denies  to 
youth  the  right  to  roam  the  streets  in  school  hours.  In  time  of 
war,  it  takes  away  from  fathers  the  right,  essential  in  peace, 
to  remain  at  home  and  care  for  their  families.  At  all  times,  by 
taxation,  it  enforces  a  community  right  over  the  right  to  private 
property.  In  all  such  examples,  the  original  abstract  rights  of 
the  individual  yield  to  the  supreme  right  of  the  state  to  self- 
preservation. 

In  like  manner,  in  contractual  relationships,  for  the  protec- 
tion of  society,  the  state  gives  to  associations  of  men  rights 
which  set  aside  concepts  of  the  liberties  of  individuals.  It  gives 
to  associations  of  medical  men  the  right  to  refuse  memberships 
to  any  persons  deemed  by  them  to  be  unqualified  for  the  prac- 
tice of  medicine.  It  goes  further.  It  punishes  by  law  men  or 
women  seeking  to  practice  methods  of  cure  not  authorized  by 

^  By  J.  W.  Sullivan.  International  Molders'  Journal.  55:888-90. 
November    1919. 


36o  SELECTED   ARTICLES 

the  medical  faculty.  In  the  profession  of  the  law,  the  state  en- 
ables associated  practitioners  to  exclude  laymen   from  the  bar. 

In  like  manner  the  unrestricted  right  of  the  wage-worker  to 
work  at  any  trade,  in  any  circumstances,  with  any  and  all  classi- 
fications of  other  wage-workers,  is  customarily  denied  by  law. 
Statutes  are  enforcible  for  the  protection  of  a  body  of  workers 
against  individuals  who  may  put  in  jeopardy  the  safety  of  their 
fellows  with  respect  to  life,  limb  or  health,  between  employers 
and  employed  under  which  the  latter  pass  upon  the  occupational 
fitness  of  eitiier  apprentices  or  journeymen  seeking  to  work 
among  them. 

Amid  the  confused  list  of  rights  recognized  by  the  capital 
group,  the  fundamental  concrete  and  practical  declaration  is  in- 
contestibly  the  right  of  wage  earners  to  organize  in  trade  and 
labor  unions  and  hence  to  bargain  collectively  and  to  be  repre- 
sented in  negotiations  by  representatives  of  their  own  choosing. 
Once  this  foundation  right  is  in  good  faith  accepted  by  employ- 
ers, they  take  upon  themselves  the  obligation  of  modifying  all 
alleged  contract  rights  of  wage  workers  in  general  which  are 
inconsistent  with  it  as  a  basic  and  encompassing  principle.  In 
accepting  this  right  they  concede  to  an  association  of  wage 
workers  the  right  of  its  self-preservation,  and  this  includes  the 
riqlit  wlicn  necessary  to  that  end  to  refuse  to  work  with  per- 
sons whose  acts  would  tend  to  destroy  the  association.  When 
non-associated  individuals,  asserting  their  right  to  "refrain  from 
joining  any  association"  and  "to  deal  directly"  with  employers 
as  they  choose,  decide  to  accept  wages  lower  than  an  associa- 
tion scale,  to  work  longer  hours  than  the  established  workday 
and  to  put  up  with  working  conditions  of  a  worse  standard  than 
those  ul)tained  by  the  association,  they  initiate  a  competition  in 
the  work  shop  which  tends  to  disintegrate  the  association. 

Thereupon,  in  the  absence  of  or,u;anization,  competing  work- 
ers lower  the  level  of  living  for  the  mass  to  the  grade  of  the 
most  necessitous,  and  hence  finally  injtire  society  in  general 
through  the  helplessness  of  all  to  stand  up  for  even  the  right  to 
live  at  civilized  standards.  Prior  to  the  world  war,  during  which 
the  cessation  of  immigration  caused  a  relative  scarcity  of  labor 
in  this  country,  the  colossal  monopolistic  industrial  corporations 
systematically  reduced  their  common  labor  approximately  to  that 
level.  They  unremittingly  drew  upon  the  vast  reservoirs  of 
Europe's  underpaid  and  casually  employed  workers  to  supply  the 


PKOBLEMS    OF   LABOR  361 

enormous  turn-over  of  labor  at  their  plants  consequent  on  the 
i2-liour  day,  a  studied  scheme  of  part  employment,  a  wage  be- 
low American  planes,  and  living  conditions  intolerable  to  human 
beings.  In  other  branches  of  American  industry  in  which  occa- 
sional competition  for  labor  among  employers  had  not  been 
superceded  by  combination,  and  in  vrhich  trade  unionism  had 
not  established  collective  bargaining,  labor  competition  led  to 
similar  injurious  social  consequences.  At  the  same  time,  em- 
ploj^ers  in  general,  aside  from  those  forming  an  economic, 
oligarchical  menace  to  our  republic,  were  learning  to  depend 
upon  the  trade  unions,  through  uniformity  in  contractual  terms, 
for  the  maintenance  of  standard  occupational  training  and  the 
general  conditions  of  industrial  stability. 

It  is  submitted  that  these  considerations  establish  the  fact 
that  the  assumed  right  of  any  and  all  wage-workers  so  to  act  as 
to  bring  ruin  to  the  labor  associations,  which  at  the  present  stage 
in  the  development  of  society  are  the  sole  bulwark  against  the 
economic  degradation  of  the  masses,  can  not  be  recognized  as 
under  all  conditions  valid.  The  abstract  right  of  the  non- 
unionist  "to  deal  directly  with  an  employer  as  he  chooses"  docs 
not  give  him  the  concrete  right  which  compels  unionists  to  work 
with  him.  His  alleged  right  to  make  any  contract  whatever 
with  an  employer  is,  in  the  absence  of  a  trade  union,  a  mere 
fiction  hiding  the  truth  that  the  employer  may  play  one  "free" 
unemployed  laborer  against  another  in  order  to  reduce  the 
wages  of  both.  The  non-unionist  has  commonly  no  represen- 
tative to  negotiate  any  wage  or  work-place  rights  for  him,  no 
voice  in  establishing  industrial  reforms  in  the  community  or  na- 
tion, no  part  in  discussing  before  legislative  bodies  problems  in 
which  the  wage-workers  are  the  most  closely  interested.  The 
non-unionist  common  laborer  is  a  social  nonentity  except  as  an 
economic  serf,  serving  by  chance  a  benovelent  or  a  malevolent 
economic  feudal  lord  when  he  is  at  work  and  having  only  the 
opportunity  to  outbid  his  fellow  wage-earner  for  a  job  when 
he  is  out  of  work. 

When  unionists  concede  to  the  non-unionist  the  legal  right 
to  refrain  from  joining  any  organization  or  to  deal  directly  with 
his  employer,  they  do  not  thereby  clothe  him  with  the  right  to 
come  among  them,  in  the  workshop  and  help  the  employer  to 
create  a  situation  rendering  possible  the  abolition  of  trade- 
unionism. 


362  SELECTED   ARTICLES 

PROPOSALS   OF   PRESIDENT'S   SECOND 
INDUSTRIAL  CONFERENCE 

Summary  of  Proposals 

The  Industrial  Conference,  convened  by  the  President  in 
Washington  on  December  i,  issues  this  statement  in  the  desire 
that  certain  tentative  proposals  be  given  considerate  study  by 
interested  individuals  and  organizations  throughout  the  country. 
It  will  reassemble  on  January  12  and  will  then  carefully  consider 
aii>  constructive  criticisms  that  may  be  submitted  to  it. 

Pending  the  growth  of  better  relationships  lietwecn  employ- 
ers and  employees,  the  practical  approach  to  the  problem  is  to 
devise  a  method  of  preventing  or  retarding  conflicts  by  provid- 
ing machinery  for  the  adjustment  of  differences.  The  Confer- 
ence believes  that  it  is  possible  to  set  up  a  more  effective  series 
of  tribunals  for  the  adjustment  of  disputes  than  at  present 
exists.  To  be  successful,  such  tribunals  must  be  so  organized  as 
to  operate  promptly  as  well  as  impartially.  There  must  be  full 
participation  by  employers  and  employees.  There  must  be  repre- 
sentation of  the  public  to  safeguard  the  public  interest.  The 
machinery  should  not  be  used  to  promote  unfairly  the  interests 
of  organizations,  either  of  labor  or  of  capital.  The  plain  fact 
is  that  the  public  has  long  been  uneasy  about  the  power  of  great 
employers ;  it  is  becoming  uneasy  about  the  power  of  great  labor 
organizations.  The  community  must  be  assured  against  domi- 
nation by  either.  On  the  other  hand,  there  must  be  equal  as- 
surance that  such  machinery  will  not  be  used  to  discriminate 
against  organizations  of  employees  or  of  employers.  Both 
should  be  protected.  The  right  of  association  on  either  side 
should  not  be  affected  or  denied  as  a  result  of  the  erection  of 
such  tribunals. 

The  plan  which  follows  docs  not  propose  to  do  away  with  the 
ultimate  right  to  strike,  to  discharge,  or  to  maintain  the  closed 
or  the  open  shop.  It  is  designed  to  bring  about  a  frank  meeting 
of  the  interested  parties  and  cool  and  calm  consideration  of  the 
questions  involved,  in  association  with  other  persons  familiar 
with  the  industry. 

The  plan  -is  national  in  scope  and  operation,  \ct  it  is  decen- 
tralized. It  is  different  from  anything  in  operation  elsewhere. 
It  is  based  upon  American  experience  and  is  designed  to  meet 
American  conditions.  To  facilitate  discussion,  the  plan  sub- 
mitted, while  entirely  tentative,  is  expressed  in  positive  form 
and  made  definite  as  to  most  details. 


PROBT.EMS    OF   LABOR  363 

Flan  for  Board  of  Inquiry  and  Adjustment 
National  Tribunal  and  Regional  Boards 

There  shall  be  established  a  National  Industrial  Tribunal,  and 
Regional  Boards  of  Inquiry  and  Adjustment. 

National  Industrial  Tribunal 

The  National  Industrial  Tribunal  shall  have  its  headquarters 
in  Washington,  and  shall  be  composed  of  nine  members  chosen 
b^-  the  President  and  confirmed  by  the  Senate.  Three  shall  repre- 
sent the  employers  of  the  country  and  shall  be  appointed  upon 
nomination  of  the  Secretary  of  Commerce.  Three  shall  repre- 
sent employees  and  shall  be  appointed  upon  nomination  of  the 
Secretary  of  Labor.  Three  shall  be  representatives  of  the  public 
interest.  Not  more  than  five  of  the  members  shall  be  of  the 
same  political  party. 

The  tribunal  shall  be,  in  general,  a  board  of  appeal.  Its  de- 
terminations on  disputes  coming  to  it  upon  an  appeal  shall  l)e  by 
unanimous  vote.  In  case  it  is  unable  to  reach  a  determination, 
it  shall  make  and  publish  majority  and  minority  reports  which 
shall  be  matters  of  public  record. 

Industrial  Regions 

The  United  States  shall  be  divided  into  a  specified  number 
of  industrial  regions.  The  Conference  suggests  12  regions  with 
boundaries  similar  to  those  established  under  the  Federal  Re- 
serve system,  with  such  modifications  as  the  industrial  situation 
may  make  desirable. 

Regional  Chairmen  and  Vice-Chairmen 

In  each  region  the  President  shall  appoint  a  regional  chair- 
man. He  shall  be  a  representative  of  the  public  interest,  shall 
be  appointed  for  a  term  of  three  years  and  be  eligible  for  re- 
appointment. 

Whenever  in  any  industrial  region,  because  of  the  multiplicity 
of  disputes,  prompt  action  by  the  Regional  Board  is  impossible, 
or  where  the  situation  makes  it  desirable,  the  National  Industrial 
Tribunal  may  in  its  discretion  choose  one  or  more  vice-chair- 
men and  provide  for  the  establishment  under  their  chairmanship 
of  additional  regional  boards. 


36.1  SELECTED   ARTICLES 

Panels  of  Employers  and  Employees  for  Regional  Boards 

Panels  of  employers  and  employees  for  each  region  shall  be 
prepared  by  the  Secretary  of  Commerce  and  the  Secretary  of 
Labor,  respectively,  after  conference  with  the  employers  and  em- 
ployees, respectively,  of  the  regions.  The  panels  shall  be  ap- 
proved by  the  President. 

At  least  20  days  before  their  submission  to  the  President 
provisional  lists  for  the  panels  in  each  region  shall  be  published 
in  such  region. 

The  panels  of  employers  shall  be  classified  by  industries; 
the  panels  of  employees  shall  be  classified  by  industries  and 
subclassified  by  crafts.  The  names  of  employers  and  employees 
selected  shall  be  at  first  entered  on  their  respective  panels  in  an 
order  determined  by  lot. 

The  selection  from  the  panels  for  service  upon  the  Regional 
Boards  shall  be  made  in  rotation  by  the  regional  chairman ; 
after  service  the  name  of  the  one  so  chosen  shall  be  transferred 
to  the  foot  of  the  panel. 

Regional  Boards  of  Adjustment 

Whenever  a  dispute  arises  in  a  plant  or  group  of  plants 
which  is  not  settled  by  agreement  of  the  parties  or  by  exlslin.'j: 
machinery,  the  chairman  may  on  his  motion,  unless  disapproved 
by  the  National  Industrial  Tribunal,  and  shall  at  the  request  of 
the  Secretary  of  Commerce  or  the  Secretary  of  Labor  or  the 
National  Industrial  Tribunal,  request  each  side  concerned  in 
such  dispute  to  submit  it  for  adjustment  to  a  Regional  Board 
of  Adjustment.  To  this  end  each  side  shall,  if  willing  to  make 
such  submission,  select  within  not  less  than  two  nor  more  than 
seven  days,  at  the  discretion  of  the  chairman,  a  representative. 
Such  selection  shall  be  made  in  accordance  with  the  rules  and 
regulations  to  be  laid  down  by  the  National  Industrial  Tribunal 
for  the  purpose  of  insuring  free  and  prompt  choice  of  the  repre- 
sentatives. 

The  appointment  of  representatives  of  both  sides  shall  con- 
stitute an  agreement  to  submit  the  issue  for  adjustment  and 
further  shall  constitute  an  agreement  by  both  sides  that  they 
will  continue,  or  reestablish  and  continue,  the  status  that  existed 
at  the  time  the  dispute  arose. 


PROBLEMS   OF   LABOR  365 

Regional  Boards  of  Inquiry 

If  either  side  to  the  dispute  fails,  within  the  period  fixed  by 
the  chairman,  to  select  its  representative,  the  chairman  shall 
proceed  to  organize  a  Regional  Board  of  Inquiry.  Such  Re- 
gional Board  of  Inquiry  shall  consist  of  the  regional  chairman, 
two  employers  selected  in  the  manner  specified  from  the  em- 
ployers' panel,  and  two  employees  selected  in  like  manner  from 
the  employees'  panel  and  of  the  representative  of  either  side  that 
may  have  selected  a  representative  and  agreed  to  submit  the 
dispute  to  the  board.  If  neither  side  shall  select  a  representa- 
tive within  the  time  fixed  by  the  chairman,  the  Board  of  Inquiry 
shall  consist  of  the  chairman  and  the  four  panel  members  only. 

The  Board  of  Inquiry  as  so  constituted  shall  proceed  to  in- 
vestigate the  dispute  and  make  and  publish  a  report,  or  majority 
and  minority  reports,  of  the  conclusions  reached,  within  5  days 
after  the  close  of  its  hearings,  and  within  not  more  than  30  days 
from  the  date  of  issue  of  the  original  request  by  the  chairman  to 
the  two  sides  to  the  dispute,  unless  extended  on  unanimous  re- 
quest of  the  board  or  the  National  Industrial  Tribunal.  It  shall 
transmit  copies  of  this  report  or  reports  to  the  Secretaries  of 
Commerce  and -of  Labor,  respectively,  and  to  the  National  Indus- 
trial Tribunal,  where  they  shall  be  matters  of  public  record. 

Umpire 

When  a  Regional  Board  of  Adjustment  is  unable  to  reach 
a  unanimous  determination  it  may  by  unanimous  vote  select  an 
umpire  and  refer  the  dispute  to  him  with  the  provision  that  his 
determination  shall  be  final  and  shall  have  the  same  force  and 
effect  as  a  unanimous  determination  of  such  Regional  Board. 

Effect  of  Decision 

Whenever  an  agreement  is  reached  by  the  parties  to  a  dis- 
pute or  a  determination  is  announced  bj-  a  Regional  Board  of 
Adjustment,  or  by  an  Umpire,  or  by  the  National  Industrial 
Tribunal,  the  agreement  or  determination  shall  have  the  full 
force  and  effect  of  a  trade  agreement  which  the  parties  to  the 
dispute  are  bound  to  carry  out. 

General  Provisions 

In  connection  with  their  task  of  inquiry  and  adjustment,  the 
Regional  Boards  and  the  National  Tribunal  shall  have  the  right 


366  SELECTED   ARTICLES 

to  subpoena  witnesses,  to  examine  them  under  oath,  to  require 
the  production  of  books  and  papers  pertinent  to  the  inquiry,  and 
their  assistance  in  all  proper  ways  to  enable  the  boards  to 
ascertain  the  facts  in  reference  to  the  causes  of  the  dispute  and 
the  basis  of  a  fair  adjustment.  Provision  shall  be  made  by  law 
for  the  protection  of  witnesses  and  to  prevent  the  misuse  of  any 
information  so  obtained. 

In  the  presentation  of  evidence  to  the  tribunal  and  the  boards 
each  side  shall  have  the  right  to  present  its  position  through 
representatives   of  its  own   choosing. 

Special  Provisions 

The  terms  of  oftice  of  members  of  the  National  Industrial 
Board  shall  be  six  j'ears ;  at  the  outset  three  members,  includ- 
ing one  from  each  group,  shall  be  appointed  for  a  term  of  two 
years,  three  members  for  a  term  of  four  years,  and  three  mem- 
bers for  a  term  of  six  years ;  thereafter  three  members,  one 
from  each  group,  shall  retire  at  the  end  of  each  period  of  two 
years. 

Relation  of  Boards  to  Existing  Machinery  for 
Conciliation  and  Adjustment 

The  establishment  of  the  National  Industrial  Tribunal  and 
the  Regional  Boards  described  shall  not  affect  existing  machin- 
ery of  conciliation,  adjustment,  and  arbitration  established  under 
the  Federal  Government,  inider  the  governments  of  the  several 
States  and  Territories  or  subdivisions  thereof,  or  under  mutual 
agreements  of  employers  and  emplo^'ees. 

Statement  as  to  Public  Utility  Industries 

Tlie  Conference  believes  that  a  plan  of  tribimals  or  Boards  of 
Adjustment  and  Inquiry  should  be  applied  to  public  utilities,  but 
in  the  adaptation  of  the  plan  two  problems  present  themselves. 
First,  governmental  regulation  of  public  utilities  is  now  usually 
confined  to  rates  and  services.  The  Conference  considers  that 
there  must  be  sonic  merging  of  responsibility  for  regulation  of 
rates  and  services  and  the  settlement  of  wages  and  conditions 
of  labor.  Such  co-ordination  would  give  greater  security  to 
the  public,  to  employee,  and  to  employer.  Second,  is  the  prob- 
lem whether  some  method  can  be  arrived  at  that  will  avert  all 
danger  of  interruption  to  service.  These  matters  require  further 
consideration   before   concrete   proposals    arc    put    forward. 


PROBLEMS   OF   LABOR  367 

Statement  as  to  Government  Employees 

The  right  of  Government  employees  to  associate  for  mutual 
protection,  the  advancement  of  their  interests,  or  the  presenta- 
tion of  grievances  cannot  be  denied,  but  no  such  employees  who 
are  connected  with  the  administration  of  justice  or  the  main- 
tenance of  public  safety  or  public  order  should  be  permitted  to 
join  or  retain  membership  in  any  organization  which  authorizes 
the  use  of  the  strike  or  which  is  affiliated  with  any  organiza- 
tion \^'hich  authorizes  the  strike. 

Further  Work  of  the  Conference 

On  reconvening  the  Conference  will  continue  its  considera- 
tion of  tribunals  for  the  furtherance  of  industrial  peace  in  gen- 
eral industry*  in  the  light  of  whatever  criticisms  and  suggestions 
the  publication  of  its  tentative  plan  may  call  forth.  It  will  re- 
ceive reports  of  investigations  that  are  being  made  for  it.  On 
the  basis  of  such  reports  and  of  further  study  of  these  and  the 
other  subjects  within  its  field,  the  Conference  hopes  that  it  may 
be  able  to  contribute  something  more  toward  the  better  indus- 
trial relations  described  in  the  words  addressed  to  it  by  the 
President  when  he  called  it  into  being — relations  in  which  "the 
workman  will  feel  himself  induced  to  put  forth  greater  effort." 

The  President's  Industrial  Conference 

(Signed) 

W.  B.  Wilson 

Chairman 
Herbert  Hoover 

Vice  Chairman 

Oscar  S.  Straus  Martin  H.  Glynn 

Henry  C.  Stuart  Thomas  W.  Gregory 

F.  W.  Taussig  Richard  Hooker 

William  O.  Thompson  Stanley  King 

Henry  J.  Waters  Samuel  W.  McCall 

George  W.  Wickersham  Henry  M.  Robinson 

Owen  D.  Young  Julius  Rosenwald 

Members 
Attested : 

Henry  R.  Seagee, 

Executive   Secretar}^ 
December  19,  1919. 


368  SELECTED   ARTICLES 

A   NEW    INDUSTRIAL   CREED' 

The  basic  facts  as  to  the  fundamental  relations  between  the 
parties  in  industry  are  as  right,  as  just  and  as  vital  for  the  com- 
mon success  of  the  industry  of  today  as  in  the  earlier  times. 
The  question  which  confronts  the  student  of  industrial  problems 
is  how  to  re-establish  personal  relations  and  co-operation  in 
spite  of  the  changed  conditions.  The  answer  is  not  doubtful 
or  questionable,  but  absolutely  clear  and  unmistakable :  Through 
adequate  representation  of  the  four  parties  thereto  in  the  coun- 
cils of  industry. 

Various  methods  of  representation  have  been  adopted,  of 
which  perhaps  the  most  conspicuous  is  the  labor  union.  As 
regards  the  organization  of  labor,  it  is  just  as  proper  and  advan- 
tageous for  labor  to  associate  itself  into  organized  groups  for 
the  advancement  of  its  legitimate  interests  as  for  capital  to  com- 
bine for  the  same  objects.  Such  associations  of  labor  manifest 
themselves  in  collective  bargaining,  in  an  effort  to  secure  better 
working  and  living  conditions,  in  providing  machinery  whereby 
grievances  may  easily  and  w-ithout  prejudice  to  the  individual 
be  taken  up  with  the  management. 

But  organization  has  its  danger.  Organized  capital  some- 
times conducts  itself  in  an  unworthy  manner,  contrary  to  law 
and  in  disregard  of  the  interest  both  of  labor  and  the  public. 
Siich  organizations  cannot  be  too  strongly  condemned  or  too 
vigorously  dealt  with.  Although  they  are  the  exception,  such 
publicity  is  generally  given  to  their  unsocial  acts  that  all  organi- 
zations of  capital,  however  rightly  managed  or  broadly  bene- 
ficent, are  thereby  brought  under  suspicion. 

Likewise  it  sometimes  happens  that  organizations  of  labor  are 
conducted  without  just  regard  for  the  rights  of  the  employer  or 
the  public  and  methods  and  practices  adopted  which,  because 
unworthy  or  unlawful,  are  deserving  of  public  censure.  Such 
organizations  of  labor  bring  discredit  and  suspicion  upon  other 
organizations  which  are  legitimate  and  useful,  just  as  is  the  case 
with  improper  organizations  of  capital,  and  they  should  be 
similarly  dealt  with. 

Fundamentally  Sound 

We  should  not,  however,  allow  the  occasional  failure  in  the 
working  of  the  principle  of  the  organization  of  labor  to  preju- 
dice us  against  the  principle  itself,   for  the  principle  is  funda- 

1  By  John  D.  Rockefeller,  Jr.  From  an  article  in  Current  Affairs 
(Boston).      December    i6,    1918.     p.   7.      -i-:-3.  46. 


PROBLEMS    OF   LABOR  ^[) 

mentally  sound.  In  the  further  development  of  the  organization 
of  labor  and  of  large  business,  the  public  interest  as  well  as  the 
interest  of  labor  and  capital  alike  will  be  best  advanced  by  what- 
ever stimulates  every  man  to  do  the  best  work  of  which  he  is 
capable;  but  a  fuller  recognition  of  the  common  interest  of  em- 
ployers and  employed,  and  by  an  earnest  effort  to  dispel  distrust 
and  hatred  and  to  promote  good  will. 

While  labor  unions  have  secured  for  labor  in  general  many 
advantages  in  hours,  wages  and  standards  of  working  conditions, 
a  large  proportion  of  the  workers  of  the  country  are  outside  of 
these  organizations  and  are  to  that  extent  not  in  a  position  to 
bargain  collectively. 

IVar  Labor  Board 

Since  the  United  States  went  into  the  war  the  representation 
of  both  labor  and  capital  in  common  councils  has  been  brought 
about  through  the  War  Labor  Board,  composed  equally  of  men 
from  the  ranks  of  labor  and  the  ranks  of  capital.  Whenever 
questions  of  dispute  have  arisen  in  various  industries  in  which 
there  w?s  no  internal  machinery  which  could  deal  with  them 
to  the  mutual  satisfaction  of  the  parties  in  interest,  the  War 
Labor  Board  has  stepped  in  and  made  its  findings  and  recom- 
mendations, which  have  been  accepted  and  adopted  by  both  la- 
bor and  capital  in  practically  every  instance.  In  this  way  more 
continuous  operation  has  been  made  possible  and  the  resort  to 
the  strike  and  lockout  has  been  less  frequent. 

In  England  there  have  been  made  during  the  past  year  three 
important  government  investigations  and  reports  looking  toward 
a  more  complete  program  of  representation  and  co-operation  on 
ihe  part  of  labor  and  capital.  The  first  is  commonly  known  as 
the  Whitley  Report,  made  by  the  Reconstruction  Committee, 
now  the  Ministry  of  Reconstruction,  through  a  Sub-Committee 
on  Relations  Between  Employers  and  Employed,  of  which  the 
Right  Hon.  J.  H.  Whitley,  M.  P.,  was  chairman. 

Whitley  Plan 

The  Whitley  plan  seeks  to  unite  the  organizations  of  labor 
and  capital  by  a  bond  of  common  interest  in  a  common  venture ; 
it  changes  at  a  single  stroke  the  attitude  of  these  powerful  aggre- 
gations of  class  interest  from  one  of  militancy  to  one  of  social 
service ;  it  establishes  a  new  relation  in  industry.  Problems  old 
and  new,  says  the  report,  will  find  their  solution  in  a  frank 
partnership  of  knowledge,  experience  and  good  will. 


370  SELECTED   ARTICLES 

Another  investigation  and  report  was  made  by  a  Commission 
on  Industrial  Unrest  appointed  by  the  Prime  Minister,  which 
made  the  following  interesting  recommendations : 

1.  That  the  principle  of  the  Whitley  report  as  regards  in- 
dustrial councils  be  adopted. 

2.  That  each  trade  should  have  a  constitution. 

3.  That  labor  should  take  part  in  the  affairs  of  industry 
as  partners  rather  than  as  employes  in  the  narrow  sense  of  the 
term. 

4.  That  closer  contact  should  be  set  up  between  the  employ- 
ers and  employed. 

The  third  report,  prepared  by  the  Ministry  of  Labor,  on  the 
question  of  the  constitution  and  working  of  the  works  commit- 
tee in  a  number  of  industries,  is  a  valuable  treatise  on  the 
objects,  functions  and  methods  of  procedure  which  have  been 
tried  in  actual  practice. 

These  reports,  together  with  a  report  on  reconstruction,  made 
by  a  sub-committee  of  the  British  Labor  party,  outlining  its 
reconstruction  program,  a  most  comprehensive  and  thoughtful 
document,  indicates  the  extent  and  variety  of  the  study  which 
has  been  given  to  the  great  problem  of  industrial  reconstruc- 
tion in  England.  All  point  toward  the  need  of  more  adequate 
representation  of  labor  in  the  conduct  of  industry  and  the  im- 
portance of  closer  relations  between  labor  and  capital. 

A  simpler  plan  than  those  to  which  reference  has  been 
made,  less  comprehensive  and  complete,  building  from  the 
bottom  up,  has  been  in  operation  for  varying  periods  of  time  in 
a  number  of  industries  in  this  country,  notably  the  Standard  Oil 
Company  of  New  Jersey,  the  Colorado  Fuel  and  Iron  Company, 
the  Consolidation  Coal  Company,  several  of  the  works  of  the 
General  Electric  Company,  and  others,  and  is  worthy  of  scrinns 
consideration  in  this  connection. 

Beginning  with  the  election  of  representatives  in  a  single 
plant,  it  is  capable  of  indefinite  development  to  meet  the  com- 
plex needs  of  any  industry  and  a  wide  extension  to  include  all 
industries.  Equally  applicable  in  industries  where  union  or  non- 
union labor,  or  both,  are  employed,  it  seeks  to  provide  full  and 
fair  representation  of  labor,  capital  and  management,  taking 
cognizance  also  of  the  community,  to  which  representation 
could  easily  be  accorded,  and  has  thus  far  developed  a  spirit  of 
co-operation  and  good  will  which  commends  it  to  both  employer 


PROBLEMS    OF   LABOR  371 

and  emplo\ec.     The  outstanding  features  of  the  plan  are  briefly 
as  follows : 

Chosen  Representatives 

Representatives  chosen  by  the  employes  in  proportion  to 
their  number  from  their  fellow  workers  in  each  plant  form  a 
basis  of  the  plan.  Joint  committees,  composed  of  an  equal  num- 
ber of  employes  or  their  representatives  and  an  equal  number  of 
officers  of  the  company,  are  found  in  each  plant  or  district. 

These  committees  deal  with  questions  of  co-operation  and 
conciliation,  safety  and  accident,  sanitation,  health  and  housing, 
recreation  and  education.  Joint  conferences  of  representatives 
and  officers  of  the  company  are  held  in  the  various  districts 
several  times  each  year,  and  there  is  also  an  annual  joint  con- 
ference, at  which  reports  from  all  districts  are  received  and 
considered. 

Another  important  feature  of  the  plan  is  an  officer  known 
as  the  President's  Industrial  Representative,  whose  duty  it  is  to 
visit  currently  all  the  plants  and  confer  with  the  representatives, 
as  well  as  to  be  available  always  for  conference  at  the  request 
of  the  representatives. 

Thus  it  will  be  seen  that  the  employes,  through  their  repre- 
sentatives chosen  from  among  themselves,  are  in  constant  touch 
and  conference  with  the  owners  through  their  representatives 
and  the  officers  in  regard  to  matters  pertaining  to  their  common 
interest. 

The  emploj'es'  right  of  appeal  is  the  third  outstanding  feature 
of  the  plan.  Any  employe  with  a  grievance,  real  or  imaginary, 
may  go  with  it  at  once  to  his  representatives,  who  frequently 
find  there  is  no  real  ground  for  grievance  and  are  able  to  so  con- 
vince the  employe.  But  if  a  real  grievance  exists  or  dissatisfac- 
tion on  the  part  of  the  employe  continues,  the  matter  is  carried 
to  the  local  boss,  foreman  or  superintendent,  where,  in  the  ma- 
jority of  cases,  questions  are  amicably  and  satisfactorily  settled. 

Further  Appeal 

Further  appeal  is  open  to  the  aggrieved  employe  to  the  higher 
officers  and  to  the  president,  and  if  satisfaction  is  not  had  here, 
the  court  of  last  appeal  may  be  the  Industrial  Commission  of  the 
State,  where  such  a  commission  exists;  the  State  Labor  Board, 
or  a  committee  of  arbitration.     Experience  proves  that  the  vast 


2,TZ  SELECTED   ARTICLES 

majority  of  difficulties  which  occur  in  an  industry  arise  between 
the  workmen  and  subordinate  officers  with  whom  they  are  in 
daily  contact. 

These  petty  officials  arf;  sometimes  arbitrary,  and  it  is  by 
their  attitude  and  action  that  the  higher  officials  and  the  stock- 
holders arc  judged.  Obviously,  the  right  of  appeal  from  their 
decision  is  important,  and,  even  if  seldom  availed  of,  tends  of 
itself  to  modify  their  attitude. 

A  further  feature  of  the  plan  is  the  employes'  bill  of  rights. 
This  covers  such  matters  as  the  right  to  caution  and  suspension 
before  discharge,  except  for  such  serious  ofTenscs  as  are  posted 
at  the  works,  the  right  to  hold  meetings  at  appropriate  places 
outside  of  working  hours,  the  right  without  discrimination  to 
membership  or  non-membership  in  any  societ)-,  fraternity  or 
union,  and  the  right  of  appeal  to  which  reference  has  just  been 
made. 

Where  some  such  plan  as  this  has  been  in  operation  for  a 
considerable  space  of  time,  some  of  the  results  obtained  arc : 

First — Uninterrupted  operation  of  the  plants  and  increased 
outptit. 

Second — Improved  working  and  living  conditions. 

Third — Frequent  and  close  contact  between  employes  and 
officers. 

Fourth — The  elimination  of  grievances  as  disturbing   factors. 

Fifth — Good  will  developed  to  a  high  degree. 

Sixth — The  creation  of  a  community  spirit. 

Rased  as  it  is  upon  principles  of  justice  to  all  those  interested 
in  its  operation,  its  success  can  be  counted  on  so  long  as  it  is 
carried  out  in  a  spirit  of  sincerity  and  fair  play.  Futhermorc, 
it  is  a  vital  factor  in  re-establishing  personal  relations  between 
the  parties  in  interest  and  developing  a  genuine  spirit  of  brother- 
hood among  them. 

Here,  then,  would  seem  to  lie  a  method  of  providing  ret>re- 
sentation  which  is  just,  which  is  effective,  which  is  applicable  to 
all  employes  whether  organized  or  unorganized,  to  all  employers 
whether  in  associations  or  not,  which  does  not  compete  or  inter- 
fere with  organizations  or  associations  in  existence,  and  which, 
w^hile  developed  in  a  single  industrial  plant  as  a  unit,  may  be 
expanded  to  include  all  plants  of  the  same  industry,  as  well  as 
all  industries. 

If   the    foregoing   points    which    I   have   endeavored    to   make 


PROBLEMS    OF   LABOR  Z7i 

are   sound,   might   not  the   four  parties  to   industry  subscribe  to 
an  industrial  creed  somewhat  as  follows : 

1.  I  believe  that  labor  and  capital  are  partners,  not  enemies; 
that  their  interests  are  common  interests,  not  opposed,  and  that 
neither  can  attain  the  fullest  measure  of  prosperity  at  the  ex- 
pense of  the  other,  but  only  in  association  with  the  other. 

2.  I  believe  that  the  community  is  an  essential  party  to  in- 
dustry, and  that  it  should  have  adequate  representation  with  the 
other  parties. 

3.  I  believe  that  the  purpose  of  industry  is  quite  as  much  to 
advance  social  well-being  as  material  well-being  and  that  in  the 
pursuit  of  that  purpose  the  interests  of  the  community  should 
be  carefully  considered,  the  well-being  of  the  employes  as  re- 
spects living  and  working  conditions  should  be  fully  guarded, 
management  should  be  adequately  recognized  and  capital  should 
be  justly  compensated,  and  that  failure  in  any  of  these  par- 
ticulars means  loss  to  all  four. 

4.  I  believe  that  every  man  is  entitled  to  an  opportunity  to 
earn  a  living,  to  fair  wages,  to  reasonable  hours  of  work  and 
proper  v,'orking  conditions,  to  a  decent  home,  to  the  opportunity 
to  play,  to  learn,  to  worship  and  to  love,  as  well  as  to  toil,  and 
that  the  responsibility  rests  as  heavily  upon  industry  as  upon 
government  or  society,  to  see  that  these  conditions  and  oppor- 
tunities prevail. 

5.  I  believe  that  industry,  efhciency  and  initiative,  wherever 
found,  should  be  encouraged  and  adequately  rewarded  and  that 
indolence,  indifference  and  restriction  of  production  should  be 
discountenanced. 

6.  I  believe  that  the  provision  of  adequate  means  for  un- 
covering grievances  and  promptly  adjusting  them,  is  of  funda- 
mental importance  to  the  successful  conduct  of  industry. 

7.  I  believe  that  the  most  potent  measure  in  bringing  about 
industrial  harmonj'  and  prosperity  is  adequate  representation 
of  the  parties  in  interest ;  that  existing  forms  of  representation 
should  be  carefully  studied  and  availed  of  in  so  far  as  they  may 
be  found  to  have  merit  and  are  adaptable  to  the  peculiar  condi- 
tions in  the  various  industries. 

8.  I  believe  that  the  most  effective  structure  of  representa- 
tion is  that  which  is  built  from  the  bottom  up,  which  includes 
all  employes,  and,  starting  with  the  election  of  representatives 
in  each  industrial  plant,  the  formation  of  joint  works  commit- 
tees, of  joint  district  councils  and  annual  joint  conferences  of 


374  SELECTED   ARTICLES 

all  the  parties  in  interest  in  a  single  industrial  corporation,  can 
be  extended  to  include  all  plants  in  the  same  industry,  all  indus- 
tries in  a  community,  in  a  nation  and  in  the  various  nations. 

9.  I  believe  that  the  application  of  right  principles  never 
fails  to  effect  right  relations;  that  the  letter  killeth  and  the 
spirit  maketh  alive ;  that  forms  are  wholly  secondary  while  at- 
titude and  spirit  are  all  important,  and  that  only  as  the  parties 
in  industry  are  animated  by  the  spirit  of  fair  plaj',  justice  to  all 
and  brotherhood,  will  any  plans  which  thej'  may  mutually  work 
out  succeed. 

10.  I  believe  that  that  man  renders  the  greatest  social  ser- 
vice who  so  co-operates  in  the  organization  of  industry  as  to 
afford  to  the  largest  number  of  men  the  greatest  opportunity  for 
self-development  and  the  enjoyment  by  every  man  of  those  bent- 
fits  which  his  own  work  adds  to  the  wealth  of  civilization. 

The  Social  Ideal 

In  the  days  when  kings  and  queens  reigned  over  their  sub- 
jects, the  gratification  of  the  desires  of  those  in  high  places  was 
regarded  as  of  supreme  moment,  but  in  these  days  the  selfish 
pursuit  of  personal  ends  at  the  expense  of  the  group  can  arid 
will  no  longer  be  tolerated.  Men  are  rapidly  coming  to  see  that 
human  life  is  of  infinitely  greater  valuer  than  material  wealth, 
that  the  health,  happiness  and  well-being  of  the  individual,  how- 
ever humble,  is  not  to  be  sacrificed  to  the  selfish  aggrandize- 
ment of  the  more  fortunate  or  more  powerful. 

Modern  thought  is  placing  less  emphasis  on  material  con- 
siderations. It  is  recognizing  that  the  basis  of  national  progress, 
whether  industrial  or  social,  is  the  health,  efficiency  and  spiritual 
development  of  the  people.  Never  has  there  been  a  more  pro- 
found belief  in  human  life  than  today.  Whether  men  world  with 
brain  or  brawn,  thej'^  are  human  beings,  with  the  same  cravings, 
the  same  aspirations,  the  same  hatreds,  the  same  capacity  for 
suffering  and  for  enjoyment. 

Standpatters  Face  Failure 

As  the  leaders  of  industry  face  this  period  of  reconstruction, 
what  will  their  attitude  be?  Will  it  be  that  of  the  standpatters, 
who  take  no  account  of  the  extraordinary  changes  which  have 
come  over  the  face  of  the  civilized  world  and  have  taken  place 
in  the  minds  of  men,  who  say:  "What  has  been  and  is  mu.st 
continue  to  be — with  our  backs  to  the  wall  we  will  fight  it  out 
along  the  old  lines  or  go  down  with  the  ship,"  who  attempt  stub- 


PROBLEMS    OF   LABOR  375 

bornly  to  resist  the  inevitable,  and  arming  themselves  to  the 
teeth,  invite  open  warfare  with  the  other  parties  in  industry,  the 
certain  outcome  of  which  will  be  financial  loss,  inconvenience 
and  suffering  to  all,  the  development  of  bitterness  and  hatred, 
and  in  the  end  the  bringing  about  through  legislation  if  not  by 
force  of  conditions  far  more  drastic  and  radical  than  could  now 
be  amicably  arrived  at  through  mutual  concession  in  friendly 
conference? 

The  New  Spirit 

Or  will  it  be  an  attitude,  in  which  I  myself  profoundly  be- 
lieve, which  takes  cognizance  of  the  inherent  right  and  justice 
of  the  principle  underlying  the  new  order,  which  recognizes  that 
mighty  changes  are  inevitable,  many  of  them  desirable,  which, 
not  waiting  until  forced  to  adopt  new  methods,  takes  the  lead 
in  calling  together  the  parties  in  interest  for  a  round-table  con- 
ference to  be  held  in  a  spirit  of  justice,  fair  play  and  brother- 
liood,  with  a  view  to  working  out  some  plan  for  co-operation 
which  will  insure  to  all  those  concerned  adequate  representa- 
tion, an  opportunity  to  earn  a  fair  wage  under  proper  working 
and  living  conditions,  with  such  restrictions  as  to  hours  as  shall 
leave  time  not  alone  for  food  and  sleep,  but  also  for  recreation 
and  the  development  of  the  higher  things  of  life. 

Never  was  there  such  an  opportunity  as  exists  today  for  the 
industrial  leader  with  clear  vision  and  broad  sympathy  per- 
manently to  bridge  the  chasm  that  is  daily  gaping  wider  between 
the  parties  in  interest  and  to  establish  a  solid  foundation  for  in- 
dustrial prosperity',  social  improvement  and  national   solidarity. 

Future  generations  will  rise  up  and  call  those  men  blessed 
who  have  the  courage  of  their  convictions,  a  proper  appreciation 
of  the  value  of  human  life  as  contrasted  with  material  gain,  and 
who,  embued  with  the  spirit  of  brotherhood,  will  lay  hold  of 
the  great  opportunity  for  leadership  which  is  open  to  them  today. 

In  conclusion  let  it  be  said  that  upon  the  heads  of  these  lead- 
ers— it  matters  not  to  which  of  the  four  parties  they  belong — 
who  refuse  to  reorganize  their  industrial  households  in  the  light 
of  the  modern  spirit,  will  rest  the  responsibility  for  such  radical 
and  drastic  measures  as  may  later  be  forced  upon  industry  if 
the  highest  interests  of  all  are  not  shortly  considered  and  dealt 
with  in  a  spirit  of  fairness.  Who,  I  say,  dares  to  block  the 
wheels  of  progress,  and  to  fail  to  recognize  and  seize  the  pres- 
ent opportunity  of  helping  to  usher  in  a  new  era  of  industrial 
peace  and  prosperity? 


^76  SELECTED   ARTICLES 

HOW  CAN  THE  E.\n^LUVER  HELP  THE  WORK- 

ER  SATISFY  HIS  FUNDAMENTAL 

HUMAN    INSTINCTS?^ 

/.     The  Instinct  of  Self-Preservation 

Maintain  licalthj  working  conditions.  Guard  against  over- 
fatigue. IVovidc  safety  devices.  No  man  can  do  his  work  well 
if  he  feels  it  is  fitting  him  only  for  the  scrap  heap. 

Provide  a  living  wage. 

Assure  your  men  of  steady  jobs  as  long  as  they  dc  their 
part.  Let  them  know  that,  if  laid  off  without  any  fault  of  theirs, 
they  will  be  given  due  notice  or  a  suitable  dismissal  wage. 
Energy  dissipated  in  worry  means  loss  to  all  concerned. 

//.     llw  Instinct  of   Worknianship 

Find  the  right  job,  mentally  and  physically,  for  every  man 
and  the  riglu  man  for  every  job. 

Enable  the  man,  by  exact  records,  to  have  a  true  and  accurate 
picture  of  his  work  and  of  any  improvement  he  makes  in  it. 

Educate  him  to  understand  what  part  his  work  plays  in  the 
whole,  and  the  uses  to  be  m.ade  of  th.e  product. 

Encourage  the  workman  to  suggest  improvements  in  the 
processes  and  thus  stimulate  personal  interest. 

Make  it  possible  for  the  workmen  to  participate  collectively 
and  regularly  in  determining  the  processes  of  production. 

Guard  against  the  tendency  to  let  the  workers  slip  into  dead- 
end jobs.     Make  it  plain  that  efficiency  means  advancement. 

Encourage  promotions  and  the  development  of  all-round 
ability. 

Make  your  directions  to  workmen  clear,  concrete  and  .specific 
and  have  a  well  thought-out  plan  of  work.  Set  the  men  a  good 
example  as  to  standards  of  workmanship. 

///.     The  Instinct   of  Self -Respect 

Itilize  the  records  of  work  to  give  the  credit   and    standing 

which  a  good  record  deserves  in  the  eyes  of  the  employer  and 

of   fellow  workers.     The  spirit  of  rivalry  spurs  initiative. 

So   far  as  possible,   use  praise   as  the   chief   incentive   rather 

than  blame  or  threat  of   dismissal.     If   it   is   really  necessary  to 

call  a  man  down,  avoid  doing  so  before  his  fellow  workers. 

'  By  Irving  Fisher,  Professor  of  Political  economy,  Yale  I'uiversity. 
In    the    Survey    for    March,    ig.    i9'9-      P-    937- 


PROBLEMS    OF    LABOR  377 

Consider  a  man  trustworth}-  until  he  has  proved  himself  un- 
trustworthy. Even-handed  justice  is  recognized  by  saint  and 
sinner. 

IV.     The  Instinct  of  Loyalty 

Encourage  the  men  to  develop  a  team  spirit  by  forming  an 
organization  of  some  kind. 

Collective  bargaining,  participation  in  shop-management, 
mass  activities,  group  singing,  marching  in  a  parade,  wearing  a 
button,  or  cheering  a  baseball  team  will  foster  a  vmited  feeling. 

Make  the  organization  worth  being  proud  of.  Pride  is  a 
weather-proof  cement. 

Loyalty  is  based  on  justice  and  mutual  consideration.  Prove 
to  the  workman  that  you  respect  his  rights  and  wishes.  Ftit 
yourself  in  his  place. 

Afford  an  opportunity  for  presenting  grievances  and  for 
tlieir  adjustment. 

If  you  want  overtime  or  special  consideration  from  him  let 
him,  if  possible,  have  the  fun  of  volunteering  the  service. 

F.     The    Instinct    of    Play 

".\11  work  and  no  play  makes  Jack  a  dull  boy."  The  balanced 
life  demands  recreation  which  provides  a  safety  valve  for  many 
inevitably  repressed  instincts.  This  play  should  be  not  frivolity, 
still  less  dissipation,  but  entertainment  v.hich  will  develop  phys- 
ical and  mental  health  and  a  broadened  outlook  on  life.  A  long 
workday  makes  proper  play  impossible,  and  is  largely  responsible 
for  the  man's  resort  to  drink  and  other  perversions  of  play. 

Encourage  membership  on  athletic  teams,  attendance  at  good 
movies,  at  reading  rooms,  and  clubs.  Have  singing  at  the  noon 
hour,  and  calisthenics  to  interrupt  the  morning  and  the  after- 
noon.    At  least,  try  brief  rest  periods. 

VI.     The  Instinct  of  Love 

Conditions  of  employment  should,  in  every  way  possible, 
conduce  to  happy  family  life.  The  unrest  caused  by  bad  in- 
stinctive life  outside  the  plant  is  demoralizing. 

.\  man  thinks  of  his  family  as  part  of  himself.  His  success 
means  their  happiness. 

Do  not  arouse  resentment  by  any  action  which  affects  the 
family  welfare. 

A  workman  with  no  home,  or  an  unhappy  home,  is  unstable. 


378  SELECTED  ARTICLES 

yil.     The  Instinct  of  Worship 

"Man  shall  not  live  by  bread  alone."  No  man  should  be 
compelled  to  do  work  which  will  prevent  attendance  at  church 
or  inspiring  public  meeting,  or  crush  idealism,  or  warp  the  spirit 
of  humanity  and  service. 

Every  man  should  have  a  religion;  and  his  daily  work  should 
be  uplifted  by,  and  really  be  a  part  of,  his  religion. 


In  a  word,  your  employe  is  a  man  with  the  same  fundamental 
human  nature  as  yourself.  If  he  is  to  be  loyal,  efficient,  and 
contented,  he  must  have  the  opportunity  to  give  expression  to 
the  best  that  is  in  him.  Without  self-expression  no  man  can 
lead  a  normal  life.  It  is  His  initiative  which  you  should  aim  to 
encourage.  This  is  not  the  ordinary  offensive  paternalism  in 
which  the  employer  takes  the  initiative  and  seeks  to  impose  his 
ideas  on  a  passive  or  unwilling  workman. 

There  is  no  adequate  self-expression  without  a  reasonable 
amount  of  self  direction.  When  the  worker  can  be  given  a  stake 
in  the  business  and  a  voice  in  its  management  almost  all  the 
important  motives  are  enlisted  and  strengthened— the  motives  of 
money-making,  accimiulating,  creating,  gaining  credit,  team  play. 


THE  NEW  LABOR  CODE  OF  THE  WORLD  ^ 

Summary  of  Conventions  and  Recommendations  of  the 
International  Labor  Conference 

I.    Limitation  of  Hours 

The  working  hours  of  persons  employed  in  any  public  or 
private  industrial  undertaking  or  in  any  branch  thereof  other 
than  an  undertaking  in  which  only  members  of  the  same  family 
are  employed  shall  not  exceed  eight  in  the  day  and  forty-eight 
in  the  week,  with  the  exception  herein  provided  for. 

//.     Free  Employment  Agencies 

Each  member  which  ratifies  this  convention  shall  establish  a 
system  of  free  employment  agencies  under  the  control  of  a  cen- 
tral authority.  Committees  which  shall  include  representatives 
of  employers  and  of  workers,  shall  be  appointed  to  advise  on 
matters  concerning  the  carrying  on  of  these  agencies. 

1  Survey.      43:Scc.   II.      December   20,    igig. 


PROBLEMS   OF   LABOR  379 

///.     Unemployment  Insurance 

The  members  of  the  International  Labor  Organization  which 
ratify  this  convention  and  which  shall  have  established  systems 
of  insurance  against  unemployment  shall,  upon  terms  agreed  be- 
tween the  members  concerned,  make  arrangements  whereby 
workers  belonging  to  one  member  and  working  in  the  territory 
of  another  shall  be  admitted  to  the  same  rates  of  benefit  of  such 
insurance  as  those  which  obtain  for  the  workers  belonging  to 
the  latter. 

IV.     Recruiting  of  Labor 

The  recruiting  of  bodies  of  laborers  in  one  country  with  a 
view  to  their  employment  in  another  country  should  be  per- 
mitted only  by  mutual  agreement  between  the  countries  con- 
cerned and  after  consultation  with  employers  and  workers  in 
each  country  in  the  industries  concerned. 

V.     Reciprocity  for  Workers 

Each  member  of  the  Liternational  Labor  Organization  shall, 
on  condition  of  reciprocity  and  upon  terms  to  be  agreed  between 
the  countries  concerned,  admit  the  foreign  workers  (together 
with  their  families)  employed  within  its  territory,  to  the  benefit 
of  its  laws  and  regulations  for  the  protection  of  its  own  workers, 
as  well  as  to  the  right  of  lawful  organization  as  enjoyed  by  its 
own  w'orkers. 

VI.     The  Employment  of  Women 

A  woman  shall  not  be  permitted  to  work  during  six  weeks 
following  her  confinement;  shall  have  the  right  to  leave  her 
work  if  she  produces  a  medical  certificate  stating  that  her  con- 
finement will  probably  take  place  w'ithin  six  weeks. 

Women  without  distinction  of  age  shall  not  be  employed 
during  the  night  in  any  public  or  private  industrial  undertaking. 

In  view  of  the  dangers  involved  to  the  function  of  maternity 
and  to  the  physical  development  of  children,  women  and  young 
persons  under  the  age  of  eighteen  years  should  be  excluded 
from  employment  in  .  .  .  [specified  processes  in  which  lead 
compounds  are  used]. 

VII.     The  Employment  of  Children 

Children  under  the  age  of  fourteen  shall  not  be  employed  in 
any  public  or  private  industrial  undertaking  or  in  any  branch 


38o  SELECTED   ARTICLES 

thereof   other   than   an   undertaking   hi   which   only   members   of 
the  same  family  are  employed. 

Young  persons  under  eighteen  years  of  age  shall  not  be  etn- 
ployed  during  the  night  in  any  public  or  private  industrial 
undertaking,  etc. 

/'///.     ll'hilc  Phosphorus  in  Matches 

Each  member  of  the  International  Labor  Organization,  which 
has  not  already  done  so,  should  adhere  to  the  international  con- 
NOiition  adopted  at  Berne  in  1906  on  the  prohibition  of  the  use 
of   white  phosphorus  in  tlic  nianufaclure  of  matches. 

IX.     Anthrax 

Arrangements  should  be  made  for  the  disinfection  of  wool 
infected  with  anthrax  spores,  either  in  the  country  exporting 
such  wool  or,  if  that  is  not  practicable,  at  the  port  of  entry  in 
the  country  importing  such  wool. 


Forezvord 

In  thirty  days'  time  the  International  Labor  Conference  cre- 
ated the  first  genuine  world  code.  The  initial  sessions  of  this 
pioneer  congress  held  under  the  authority  of  the  League  of  Na- 
tions, lasted  only  one  mouth.  The  assemblage  was  convened  on 
October  29.  On  November  29  the  conference  adjourned. 
Within  that  period  twenty-five  sessions  were  held.  The  confer- 
ence was  handicapped  by  the  barrier  of  language.  Translation 
rendered  debate  slow.  Despite  this  necessity  for  repetition  the 
International  Labor  Conference  actually  did  its  work  with  sur- 
prising facility. 

The  United  States  Senate  consumed  five  months  in  refusing 
to  ratify  the  treaty.  In  contrast  the  achievements  of  the  labor 
conference  stand  out  vividly.  Employers,  employes,  and  gov- 
ernmental officials  showed  in  the  international  conference  a 
ca])acity  for  cooperation  and  a  determination  to  build  which  are 
good  omens  for  the  future  of  the  League  of  Nations.  If  the 
delegates  had  been  moved  by  petty  considerations  this  first  at- 
tempt at  international  legislation  would  have  been  doomed.  If 
furthermore  the  International  Labor  Conference  had  failed  to 
agree,  the  possibility  of  attaining  other  success  under  the  ma- 
chinery of  the  League  of  Nations  would  have  been  seriously 
injured. 

The  conference  energetically  and   wisely  concentrated  its  at- 


PROBLEA'IS    OF   LABOR  3^1 

tention  on  the  program  prepared  for  it  by  the  Peace  Conference. 
Able  work  was  done.  No  American  legislative  body,  certainly, 
has  ever  made  such  effective  use  of  scientific  methods  or  of  ex- 
pert assistance  in  the  formulation  of  laws.  Skilled  advisers 
from  the  constituent  members  of  the  League  participated.  The 
conference  drafted  principles  which  if  applied  will  mean  enorm- 
ous industrial  progress  everywhere.  But  it  was  not  content 
merely  to  enunciate  principles.  Realizing  that  the  value  of  a 
law  is  measured  by  the  degree  of  its  enforcement,  the  confer- 
ence rightly  urged  that  every  country  which  accepted  its  recom- 
mendations and  legalized  its  draft  conventions  establish  the 
requisite  machinery  for  inspection  and  enforcement. 

The  conference  dealt  with  all  of  the  five  items  of  the  agenda 
referred  to  it  by  the  peace  conference.     These  were: 

1.  -Application    of    principle   of    the   eight-hour    day  or    of  the 

forty-eight  hour  week. 

2.  Question  of  preventing  or  providing  against  unemployment. 

3.  Women's  employment : 

(a)  Before   and   after   child-birth,    including   the   question 

of  maternity  benefit; 

(b)  During  the  night; 

(c)  In  imhealthy  processes. 

4.  Employment  of  children  : 

(a)  Minimum  age  of  employment; 

(b)  During  the  night; 

(c)  In  unhealthy  processes. 

5.  Extension   and  application  of  the   International   Conventions 

adopted  at  Berne  in  1906  on  the  prohibition  of  night  work 
for  women  employed   in   industry   and   the   prohibition   of 
the    use    of    white    phosphorus    in     the    manufacture    of 
matches. 
The  paragraphs   which   deal   with   the   machinery   of   ratifica- 
tion  are   identical    in   each  case.      Consequently   they   are   repro- 
duced only  once  in  this   reprint.     The   form   used   for  the  draft 
conventions  throughout  is  that  here  printed   in   full   in   the  con- 
vention dealing  with  the  eight-hour  day  and  the  forty-eight-hour 
week.     The   form   of   introduction   used   in   connection   with   the 
recommendations   is   consistently  that   set   forth    in   the   propo'^al 
dealing  with  unemployment. 

The  principles  formulated  become  effective  only  when  made 
legal  by  the  legislative  agencies  of  the  governments  composing 
the  League  of  Nations. 


382  SELECTED  ARTICLES 

Conventions  and  recommendations 

Draft   Convention  Limiting   the  Hours   of   Work   in    Industiial 

Undertakings  to  Eight  in  the  Day  and  Forty-eight 

in  the  Week 

The  General  Conference  of  the  International  Labor  Organi- 
zation of  the  League  of  Nations,  Having  been  convened  at 
Washington  by  the  Government  of  the  United  States  of  Amer- 
ica, on  the  29th  day  of  October,  1919,  and 

Having  decided  upon  the  adoption  of  certain  proposals  with 
regard  to  the  "application  of  the  principle  of  the  eight-hours  day 
or  the  forty-eight-hours  week,"  which  is  the  first  item  in  the 
agenda  for  the  Washington  meeting  of  the  Conference,  and 

Having  determined  that  these  proposals  shall  take  the  form 
of  a  draft  international  convention,  adopts  the  following  Draft 
Convention  for  ratification  by  the  Members  of  the  International 
Labor  Organization,  in  accordance  with  the  Labor  Part  of  the 
Treaty  of  Versailles  of  28  June,  1919,  and  of  the  Treaty  of  St. 
Germain  of  10  September,  1919 : 

Article  i.  For  the  purpose  of  this  Convention,  the  term 
"industrial  undertaking"  includes  particularly: 

(a)  Mines,  quarries,  and  other  works  for  the  extraction  of  minerals 
from   the  earth. 

(fc)  Industries  in  which  articles  are  manufactured,  altered,  cleaned 
repaired  ornamented,  furnished,  adapted  for  sale,  broken  up  or  de- 
molished, or  in  which  materials  are  transformed;  including  shipbuilding 
and  the  generation,  transformation  and  transmission  of  electricity  or 
motive   power   of   any   kind. 

(c)  Construction,  reconstruction,  maintenance,  repair,  alteration,  or 
demolition  of  any  building,  railway,  tramway  harbour,  dock  pier  canal, 
inland  waterway,  road,  tunnel,  bridge  viaduct  sewer  drain,  well,  telegraphic 
or  telephonic  installation,  electrical  undertaking,  gas  work,  water  work 
or  other  work  of  construction  as  well  as  the  preparation  for  or  laying 
the   foundations   of  any  such   work   or   structure. 

(rf)  Transport  of  passengers,  or  goods,  by  road,  rail,  sea  or  inland 
waterway,  including  the  handling  of  goods  at  docks,  quays,  wharves  or 
warehouses     but    excluding    transport    by    hand. 

The  provisions  relative  to  transport  by  sea  and  on  inland 
waterways  shall  be  determined  by  a  special  conference  dealing 
with  employment  at  sea  and  on  inland  waterways. 

The  competent  authority  in  each  country  shall  define  the 
line  of  division  which  separates  industry  from  commerce  and 
agriculture. 

Article  2.  The  working  hours  of  persons  employed  in  any 
public  or  private  industrial  undertaking  or  in  any  branch 
thereof,  other  than  an  undertaking  in  which  only  members  of  the 
?ame  family  are  employed,  shall  not  exceed  eight  in  the  day  and 
fort3'-eight  in  the  week,  vnt\\  exceptions  hereinafter  provided  for. 


PROBLEMS   OF   LABOR  383 

(o)  The  provisions  of  this  Convention  shall  not  apply  to  persons 
holding  positions  of  supervision  or  management,  nor  to  persons  em- 
ployed in  a  confidential  capacity. 

(t)  Where  by  law,  custom,  or  agreement  between  employers'  and 
workers'  organizations,  or  where  no  such  organizations  exist  between  em- 
ployers' and  workers'  representatives,  the  hours  of  work  on  one  or  more 
days  of  the  week  are  less  than  eight,  the  limit  of  hours  may  be  exceeded  on 
the  remaining  days  of  the  week  by  the  sanction  of  the  competent  public 
authority,  or  by  agreement  between  such  organizations  or  representatives; 
provided,  however,  that  in  no  case  under  the  provision  of  this  paragraph 
shall  the   daily  limit   of  eight  hours  be   exceeded  by  more   than   one  hour. 

(c)  Where  persons  are  employed  in  shifts  it  shall  be  permissible  to 
employ  persons  in  excess  of  eight  hours  in  any  one  day  and  forty- 
eight  hours  in  any  one  week,  if  the  average  number  of  hours  over  a 
period  of  three  weeks  or  less  does  not  exceed  eight  per  day  and  forty- 
eight  per  week. 

Article  3.  The  limit  of  hours  of  work  prescribed  in  Article 
2  may  be  exceeded  in  case  of  accident,  actual  or  threatened,  or 
in  case  of  urgent  work  to  be  done  to  machinery  or  plant,  or  in 
case  of  force  majeure,  but  onlj'  so  far  as  may  be  necessary  to 
avoid  serious  interference  with  the  ordinary  working  of  the 
undertaking. 

Article  4.  The  limit  of  hours  of  work  prescribed  in  Article 
2  may  also  be  exceeded  in  those  processes  which  are  required  by 
reason  of  the  nature  of  the  process  to  be  carried  on  continuously 
by  a  succession  of  shifts,  subject  to  the  condition  that  the  work- 
ing hours  shall  not  exceed  fifty-six  in  the  week  on  the  average. 
Such  regulation  of  the  hours  of  work  shall  in  no  case  affect  any 
rest  days  which  niaj^  be  secured  by  the  national  law  to  the  work- 
ers in  such  processes  in  compensation  for  the  weekly  rest  day. 

Article  5.  In  exceptional  cases  where  it  is  recognized  that 
the  provisions  of  Article  2  cannot  be  applied,  but  only  in  such 
cases,  agreements  between  workers'  and  employers'  organiza- 
tions concerning  the  daily  limit  of  work  over  a  longer  period  of 
time,  may  be  given  the  force  of  regulations,  if  the  Government, 
to  which  these  agreements  shall  be  submitted,  so  decides.  The 
average  number  of  hours  worked  per  week,  over  the  number  of 
weeks  covered  by  any  such  agreement,  shall  not  exceed  forty- 
eight. 

Article  6.  Regulations  made  by  public  authority  shall  de- 
termine for  industrial  undertakings: 

(a)  The  permanent  exceptions  that  may  be  allowed  in  preparatory  or 
complementary  work  which  must  necessarily  be  carried  on  outside  th'- 
limits  laid  down  for  the  general  working  of  an  establishment,  or  for 
certain   classes    of   workers   whose   work  is   essentially   intermittent. 

(&)  The  temporary  exception  that  may  be  allowed,  so  that  estab- 
lishments may  deal   with  exceptional  cases   of  pressure  of  work. 

These  regulations  shall  be  made  only  after  consultation  with 
the  organizations  of  employers  and  workers  concerned,  if  any 
such  organizations  exist.     These  regulations  shall  fix  the  maxi- 


384  SELECTED   ARTICLES 

mum  of  additional  liours  in  each  instance,  and  the  rate  of  pay 
for  overtime  shall  not  be  less  than  one  and  one-quarter  times 
the  regular  rate. 

Article  7.  Each  Government  shall  communicate  to  the  In- 
ternational Labor  Office : 

(o)  A  list  of  the  processes  which  are  classed  as  being  necessarily 
continuous   in    character    under   Article   4; 

(b)  Full  information  as  to  working  of  the  agreements  mentioned 
in  Article   5;    and 

(c)  Full  information  concerning  the  regulations  made  under  Article 
6    and    their    application. 

The  International  Labor  Office  shall  make  an  annual  report 
thereon  to  the  General  Conference  of  the  International  Labor 
Organization. 

Article  8.  In  order  to  facilitate  the  enforcement  of  the  pro- 
visions of  this  Convention,  every  employer  shall  be  required : 

(a)  To  notify  by  means  of  the  posting  of  notices  in  conspicuous 
places  in  the  works  or  other  suitable  place,  or  by  such  other  method 
as  may  be  approved  by  the  Government,  the  hours  at  which  work  begins 
and  ends  and  where  work  is  carried  on  by  shifts  the  hours  at  which  each 
shift  begins  and  ends.  These  hours  shall  be  so  fixed  that  the  duration 
of  the  work  shall  not  cxcei-d  tlu-  liniits  pn-sc-ibed  by  this  Convention, 
and  when  so  notified  they  shall  not  be  changed  except  with  such  notice 
and   in   such   manner   as   may   be    approved   by    the    Government. 

(b)  To  notify  in  the  same  way  such  rest  intervals  accorded  durin? 
the  period  of  work   as  are   not  reckoned  as  part   of  the   working  hours. 

(c)  To  keep  a  record  in  the  form  prescribed  by  law  or  regulation 
in  each  country  of  all  additional  hours  worked  in  pursuance  of  Article 
3    and   6    of    this    Convention. 

It  shall  be  made  an  offense  against  the  law  to  employ  any 
person  outside  the  hours  fixed  in  accordance  with  paragraph  (a), 
or  during  the  intervals  fixed  in  accordance  with  paragraph   (b). 

Article  g.  In  the  application  of  this  Convention  to  Japan 
the  following  modifications  and  conditions  shall  obtain  : 

(a)  The    term    "industrial     undertaking"    includes    particularly 

The    undertakings    enumerated    in    paragraph    (a)    of    Article    i  : 

The  undertakings  enumerated  in  paragraph  (b)  of  Article  t, 
provided   there   are    at   least    ten    workers   employed; 

The  undertakings  enumerated  in  paragraph  (c)  of  .\rticle  i. 
in  so  far  as  these  undertakings  shall  be  defined  as  "factories" 
by    the    competent    authority: 

The  undertakings  enumerated  in  paragraph  (d)  of  Article  i. 
except  transport  of  passengers  or  goods  by  road,  handling  of 
goods  at  flocks,  i|uays,  wharves,  and  warehouses,  and  transport 
by   hand,   and 

Regardless  of  the  numbers  of  persons  employed,  such  of  the 
undertakings  enumerated  in  paragraphs  (b)  and  (f)  of  Article 
I  as  may  be  declared  by  the  competent  authority  either  to  be 
highly   dangerous    or    to    involve    unhealthy    processes. 

(b)  The  actual  working  hours  of  persons  of  fifteen  years  of  age  or 
over  in  any  public  or  private  industrial  undertaking,  or  in  any  branch 
thereof,  shall  not  exceed  fifty-seven  in  the  week,  except  that  in  the  raw- 
silk   industry   the  limit   may  be   sixty  hours   in    the   week. 

(r")  The  actual  working  hours  of  persons  under  fifteen  years  of  age 
in  any  public  or  private  industrial  undertaking,  or  in  any  branch  thereof 
and  of  all  miners  of  whatever  age  engaged  in  underground  work  in  the 
mines   shall   in   no   case   exceed    forty  eit^ht    in    the  week. 


PROBLEMS   OF   LABOR  385 

id)  The  limit  of  hours  of  work  may  be  modified  under  ihc  con- 
ditions provided  tor  in  Articles  ^,  3,  4,  and  5  vi  this  Convention,  but  in 
no  case  shall  the  length  of  such  modification  bear  to  the  length  of  the 
basic   week   a    proportion   greater   than   that   which   obtains   in   those   Articles. 

(f)  A  Weekly  rest  period  of  twenty-four  consecutive  hours  shall  be 
allowed  to   all  classes  of  workers. 

(/)  The  provision  in  Japanese  factory  legislation  limiting  its  ap- 
plication to  places  employing  fifteen  or  more  persons  shall  be  amended 
so  that  such  legislation  shall  apply  to  places  employing  ten  or  more 
persons. 

ig)  The  provisions  of  the  above  paragraphs  of  this  Article  shall 
be  brought  into  operation  not  later  than  i  July,  1922,  except  that  the 
provisions  of  Article  4  as  modified  by  paragraph  (d)  of  this  Article 
shall   be   brought   into   operation   not   later   than    i    July,    1923. 

ih)  The  age  of  fifteen  prescribed  in  paragraph  (c)  of  this  Article 
shall  be  raised,   not  later  than   i   July,    1925,  to  sixteen. 

.\kticle  10.  Li  British  India  the  principle  of  a  sixt^-hour 
week  shall  be  adopted  for  all  workers  in  the  industries  at  pries- 
cnt  covered  by  the  factory  acts  administered  by  the  Government 
of  India,  in  mines,  and  in  such  branches  of  railway  work  as 
shall  be  specified  for  this  purpose  b}'  the  competent  aulhority. 
Any  modification  of  this  limitation  made  b}'  the  competent  au- 
thority shall  be  subject  to  the  provisions  of  Articles  6  and  7  of 
this  Convention.  In  other  respects  this  Convention  shall  not 
apply  to  India,  but  further  provisions  limiting  the  hours  of  v/ork 
in  India  shall  be  considered  at  a  future  meeting  of  the  Gen- 
eral Conference. 

Article  ii.  The  provisions  of  this  Con.vention  shall  not 
apply  to  China,  Persia,  and  Siairi,  but  provisions  limiting  the 
hours  of  work  in  these  countries  shall  be  considered  at  a  future 
meeting  of  the  General  Conference. 

Article  12.  In  the  application  of  this  Convention  to  Greece, 
the  date  at  which  its  provisions  shall  be  brought  into  operation 
in  accordance  with  Article  19  may  be  extended  to  not  later  than 
I  July,  1923,  in  the  case  of  the  following  industrial  undertakings : 

(i)  Carbon-bisulphide   works. 

(2)  Acid    works. 

(3)  Tanneries. 

(4)  Paper  mills, 
(s)  Printing  works. 

(6)  Sawraills. 

(7)  Warehouses   for  the   handling  and   preparation   of  tobacco. 

(8)  Surface    mining. 

(9)  Foundries. 

(10)  Lime    works. 

(11)  Dye    works. 

(12)  Glassworks    (blowers). 

(13)  Gas   works   (firemen). 

(14)  Loading   and   unloading   merchandise. 

and  to  not  later  than  i  July,  1924,  in  the  case  of  the  following 
industrial  undertakings : 

(i)  Mechanical  industries:  Machine  shops  f«r  engines,  safes,  scales, 
beds,  tacks,  shells  (sporting),  iron  foundries,  bronze  foundries,  tin  shops, 
plating   shops,    manufactories    of    hydraulic    apparatus. 


386  SELECTED  ARTICLES 

(i)  Constructional  industries:  Limekilns,  cement  works,  plaslcrcrs' 
shops,  tile  yards  manufacturies  of  bricks  and  pavements,  potteries,  marble 
yards,   excavating  and  building  work. 

(3)  Textile  industries;  Spinning  and  weaving  mills  of  all  kinds, 
except  dye  works. 

(4)  Food  industries:  Flour  and  gristmills,  bakeries,  macaroni  fac- 
tories, manufactories  of  wines,  alcohol,  and  drinks,  oil  works,  breweries, 
manufactories  of  ice  and  carbonated  drinks,  manufactories  of  confec- 
tioners' products  and  chocolate,  manufactories  of  sausages  and  preserves, 
.slaughterhouses,    and    butcher   shops. 

(5)  Chemical  industries:  Manufactories  of  synthetic  colors,  glas.'- 
works  (except  the  blowers),  manufactories  of  essence  of  turpentine  and 
tartar,  manufactories  of  oxygen  and  pharmaceutical  products,  manufac- 
tories of  flaxseed  oil,  manufactories  of  glycerine,  manufactories  of  cal- 
cium carbide,  gas  works   (except  the  firemen). 

(6)  Leather  industries:  Shoe  factories,  manufactories  of  leather 
goods. 

(7)  Paper  and  printing  industries:  Manufactories  of  envelojics, 
record  books,  boxes,  bags,  bookbinding,  lithographing,  and  zinc-engraving 
shops. 

(8)  Clothing  industries:  Clothing  shops,  underwear  and  trimmings, 
workshops  for  pressing,  workshops  for  bed  coverings,  artificial  flowers, 
feathers,    and    trimmings,    hat    and    umbrella    factories. 

(9)  W'oodvvorking  industries:  Joiners'  shops  coopers'  sheds,  wa.gon 
factories,  manufactories  of  furnilure  and  chairs,  picture-framing  establish- 
ments,   brush    and   broom    factories. 

(10)  Electrical  industries:  Power  houses,  shops  for  electrical  in- 
stallations. 

(11)  Transportation  by  land:  Employees  on  railroads  and  street 
cars,   firemen,   drivers,   and   carters. 

Article  it,.  In  the  application  of  this  Convention  to  Rou- 
mania  the  date  at  which  its  provisions  shall  be  brought  into 
operation  in  accordance  with  Article  19  may  be  extended  to  not 
later  than  I  July,  1924. 

Article  14.  Tlie  operation  of  the  provisions  of  this  Con- 
vention may  be  suspended  in  any  country  by  the  Government  in 
the  event  of  war  or  other  emergency  endangering  the  national 
safety. 

Article  15.  The  formal  ratifications  of  this  Convention, 
muler  the  conditions  set  forth  in  Part  XIII  of  the  treaty  of 
\'ersailles  of  28  June,  1919,  and  of  the  treaty  of  St.  Germain 
of  10  September,  1919,  shall  be  communicated  to  the  Secretary 
General  of  the  League  of  Nations  for  registration. 

Article  16.  Each  Member  which  ratifies  this  Convention  en- 
pages  to  apply  it  to  its  colonies,  protectorates  and  possessions 
which  are  not  fully  self-governing: 

(a)  Except  where  owing  to  the  local  conditions  its  provisions  are 
inapplicable;    or 

(b)  Subject  to  such  modifications  as  may  be  necessary  to  adapt  its 
provisions    to    local    conditions. 

Each  memljer  shall  notify  lo  the  International  Labor  Office 
the  action  taken  in  respect  of  each  of  its  colonies,  protectorates, 
and  possessions  which  are  not  fully  self-governing. 

Article  17.  As  soon  as  the  ratifications  of  two  Members 
of  the   International   Labor   Organization   have   been   registered 


PROBLEMS   OF  LABOR  387 

with  the  Secretariat,  the  Secretary  General  of  the  League  of 
Nations  shall  so  notify  all  the  Members  of  the  International 
Labor  Organization. 

Article  18.  This  Convention  shall  come  into  force  at  the 
date  on  which  such  notification  is  issued  by  the  Secretary  Gen- 
eral of  the  League  of  Nations,  and  it  shall  then  be  binding  only 
upon  those  Members  which  have  registered  their  ratification 
with  the  Secretariat.  Thereafter  this  Convention  will  come  into 
force  for  any  other  Member,  at  the  date  on  which  its  ratification 
is  registered  with  the  Secretariat. 

Article  19.  Each  Member  which  ratifies  this  Convention 
agrees  to  bring  its  provisions  into  operation  not  later  than  i  July, 
1921,  and  to  take  such  action  as  may  be  necessary  to  make  these 
provisions  effective. 

Article  20.  A  Member  which  has  ratified  this  Convention 
may  denounce  it  after  the  expiration  of  ten  years  from  the  date 
on  which  the  Convention  first  comes  into  force,  by  an  act  com- 
municated to  the  Secretary  of  the  League  of  Nations  for  regis- 
tration. Such  denunciation  shall  not  take  effect  until  one  year 
after  the  date  on  which  it  is  registered  with  the  Secretariat. 

Article  21.  At  least  once  in  ten  j^ears  the  Governing  Body 
of  the  International  Labor  Office  shall  present  to  the  General 
Conference  a  report  on  the  working  of  this  Convention,  and 
shall  consider  the  desirability  of  placing  on  the  agenda  of  the 
Conference  the  question  of  its  revision  or  modification. 

Article  22.  The  French  and  English  texts  of  this  Conven- 
tion shall  both  be  authentic. 

Draft  Convention  Concerning  Unemployment 

.\eticlf.  I.  Each  Member  which  ratifies  this  Convention 
shall  communicate  to  the  International  Labor  Office,  at  inter- 
vals as  short  as  possible  and  not  exceeding  three  months,  all 
available  information,  statistical  or  otherwise,  concerning  unem- 
ployment, including  reports  on  measures  taken  or  contemplated 
to  combat  unemployment.  Whenever  practicable,  the  informa- 
tion shall  be  made  available  for  such  communication  not  later 
than  three  months  after  the  end  of  the  period  to  which  it  relates. 

Article  2.  Each  Member  which  ratifies  this  Convention 
shall  establish  a  system  of  free  public  employment  agencies 
under  the  control  of  a  central  authority.  Committees,  which 
shall  include  representatives  of  employers  and  of  workers,  shall 
be  appointed  to  advise  on  matters  concerning  the  carrying  on  of 
these  agencies. 


388  SELECTED   ARTICLES 

Where  both  public  and  private  free  eniploymeut  agencies 
exist,  steps  shall  be  taken  to  coordinate  the  operations  of  such 
agencies  on  a  national  scale. 

The  operations  of  the  various  national  systems  shall  be  co- 
ordinated by  the  International  Labor  Oflice  in  agreement  with 
the  countries  concerned. 

Article  3.  The  Members  of  the  International  Labor  Organ- 
ization which  ratify  this  Convention  and  which  have  established 
systems  of  insurance  against  unemployment  shall,  upon  terms 
being  agreed  between  the  Members  concerned,  make  arrange- 
ments whereby  workers  belonging  to  one  Member  and  working 
in  the  territory  of  another  shall  be  admitted  to  the  same  rates 
of  benefit  of  such  insurance  as  those  which  obtain  for  the 
workers  belonging  to  the  latter. 

Recommendation  Concerning  Unemployment 

The  General  Conference  of  the  International  Labor  Organi- 
zation of  the  League  of  Nations. 

Having  been  cunvcncd  at  Washington  by  tiie  Goveinincnt  of  the 
United  States  of  America  on  the  29th  day  of   October,   1919  and 

Having  decided  upon  the  adoption  of  certain  proposals  with^  regard 
to  the  "question  of  preventing  or  providing  against  unemployment,"  which 
is  the  second  item  in  the  agenda  for  the  Washington  meeting  of  the 
Conference,  and 

Having  determined  that  these  proposals  shall  take  the  form  of  a 
recommendation. 

Adopts  the  following  Recommendation,  to  be  submitted  to  the 
Members  of  the  International  Labor  Organization  for  con- 
sideration with  a  view  to  effect  being  given  to  it  by  national 
legislation  or  otherwise,  in  accordance  with  the  Labour  Part  of 
the  Treaty  of  Versailles  of  28  June,  1919,  and  of  the  Treaty  of 
St.  Germain  of   10  September,   1919 : 

I.  The  General  Conference  recommends  that  each  Member 
of  the  International  Labor  Organization  take  measures  to  prohibit 
the  establishment  of  emploj-ment  agencies  which  charge  fees  or 
which  carry  on  their  business  for  profit.  Where  such  agencies 
already  exist,  it  is  further  recommended  that  they  be  permitted 
to  operate  only  under  Government  licenses,  and  that  all  prac- 
ticable measures  be  taken  to  abolish  such  agencies  as  soon  as 
possible. 

II.  The  General  Conference  recommends  to  the  Members 
of  the  International  Labor  Organization  that  the  recruiting  of 
bodies  of  workers  in  one  country  with  a  view  to  their  emplo>  - 
ment  in  another  country  should  be  permitted  only  by  mutual 
agreement  between   the   countries   concerned    and    after   consul- 


PROBLEMS    OF   LABOR  3«9 

tation  with  employers  and  workers  in  each  country-  in  the  in- 
dustries concerned. 

IlL  The  General  Conference  recommends  that  each  Mem- 
ber of  tlie  International  Labor  Organization  establish  an  effec- 
tive system  of  unemployment  insurance,  either  through  a  Gov- 
ernment system  or  through  a  system  of  Government  subven- 
tions to  associations  whose  rules  provide  for  the  payment  of 
benefits  to  their  unemployed  members. 

IV.  The  General  Conference  recommends  that  each  Mem- 
ber of  the  International  Labor  Organization  coordinate  the 
execution  of  all  work  undertaken  under  public  authority,  with 
a  view  to  reserving  such  work  as  far  as  practicable  for  periods 
of  unemployment  and  for  districts  most  affected  by  it. 

Recommendation  Concerning  Reciprocity  of  Treat- 
ment of  Foreign  Workers 

The  General  Conference  reccmmends  that  each  Member  of 
the  International  Labor  Organization  shall,  on  condition  of  rec- 
iprocity and  upon  terms  to  be  agreed  between  the  countries 
concerned,  admit  the  foreign  workers  (together  with  their  fam- 
ihes)  emplo3'ed  within  its  territory,  to  the  benefit  of  its  laws 
and  regulations  for  the  protection  of  its  own  workers,  as  well 
as  to  the  right  of  lawful  organization  as  enjoyed  by  its  own 
workers. 

Draft  Convention  Concerning  the  Employment  of 
Women  Before  and  After  Childbirth 

Article  i.  For  the  purpose  of  this  Convention,  the  term 
"industrial  undertaking"  includes  particularly : 

(o)  Mines,  quarries,  and  other  works  for  the  extraction  of  minerals 
from    the   earth. 

(b)  Industries  in  which  articles  are  manufactured,  altered,  cleaned, 
repaired,  ornamented,  finished,  adapted  for  sale,  broken  up  or  demolished, 
or  in  which  materials  are  transformed;  including  shipbuilding,  and  the 
generation,  transformation,  and  transmission  of  electricity  or  motive 
power  of  any  kind. 

(c)  Construction,  reconstruction,  maintenance,  repair,  alteration,  or 
demolition  of  any  building,  railway,  tramway,  harbor,  dock,  pier,  canal, 
inland  waterway,  road,  tunnel,  bridge,  viaduct,  sewer,  drain,  well,  tele- 
graphic or  telephonic  installation,  electrical  undertaking,  gas  work,  water 
work,  or  other  work  of  construction,  as  well  as  the  preparation  for  or 
laying   the    foundation   of   any   such   work   or   structure. 

(3)  Transport  of  passengers  or  goods  by  road  or  rail,  including  the 
handling  of  goods  at  docks,  quays,  wharves,  and  warehouses,  but  ex- 
cluding   transport    by   band. 

For  the  purpose  of  this  Convention,  the  term  "commercial 
undertaking"  includes  any  place  where  articles  are  sold  or  where 
commerce  is  carried  on. 


390  SELECTED   ARTICLES 

The  competent  authority  in  each  country  shall  define  the 
line  of  division  which  separates  industry  and  commerce  from 
agriculture. 

Article  2.  For  the  purpose  of  this  Convention,  the  term 
"woman"  signifies  any  female  person,  irrespective  of  age  or  na- 
tionality, whether  married  or  unmarried,  and  the  term  "child" 
signifies  any  child  whether  legitimate  or  illegitimate. 

Article  3.  In  any  public  or  private  industrial  or  commercial 
undertaking,  or  in  any  branch  thereof,  other  than  an  undertak- 
ing in  which  only  members  of  the  same  family  are  employed, 
a  woman — 

(a)  Shall  not  be  i)ermittc(l  to  work  during  the  six  weeks  following 
her  confinement. 

(b)  Shall  have  the  right  to  leave  her  work  if  she  produces  a  medical 
certificate  stating  that  her  confinement  will  probably  take  place  within 
six  weeks. 

(r)  Shall,  wIuIl-  she  i.s  ab.sc-nt  {vam  hvv  work  in  jiursuancc  of  para- 
graphs (a)  and  (b),  be  paid  benefits  sufficient  for  the  full  and  healthy 
maintenance  of  herself  and  her  child,  provided  either  out  of  public  funds 
or  by  means  of  a  system  of  insurance,  the  exact  amount  of  which  shall 
be  determined  by  the  competent  authority  in  each  country,  and  as  an  addi- 
tional benefit  shall  be  entitled  to  free  attendance  by  a  doctor  or  certified 
midwife.  No  mistake  of  the  medical  adviser  in  estimating  the  date  of 
confinement  shall  preclude  a  woman  from  receiving  these  benefits  from 
the  date  of  the  medical  certificate  up  to  the  date  on  which  the  confine- 
ment actually   takes  place. 

(t/)  Shall  in  any  case,  if  she  is  nursing  her  child,  be  allowed  half 
an  hour  twice  a  day  during  her  working  hours  for  this  purpose. 

Article  4.  Where  a  woman  is  absent  from  her  work  in 
accordance  with  paragraphs  (a)  or  (b)  of  Article  3  of  this  Con- 
vention, or  remains  absent  from  her  work  for  a  longer  period 
as  a  result  of  illness  medically  certified  to  arise  out  of  pregnancy 
or  confinement  and  rendering  her  unfit  for  work,  it  shall  not  be 
lawful,  until  her  absence  shall  have  exceeded  a  maximum  period 
to  be  fixed  by  the  competent  authority  in  each  countrj',  for  her 
employer  to  give  her  notice  of  dismissal  during  such  absence, 
nor  to  give  her  notice  of  dismissal  at  such  a  time  that  the  notice 
would  expire  during  such  absence. 

Draft  Convention  Concerning  Employment  of  lyonien 
During  the  Night 

Article  i.  For  the  purpose  of  this  Convention,  the  term 
"industrial  undertaking"  includes  particularly : 

(a)  Mines,  quarries,  and  other  works  for  the  extraction  of  minerals 
from   the   earth. 

(b)  Industries  in  which  articles  are  manufactured,  altered  cleaned, 
repaired,  ornamented,  finished,  adapted  for  sale,  broken  up  or  demolishrd, 
or  in  which  materials  are  transformed;  including  shipbuilding,  and  the 
germination,  transformation,  and  transmission  of  electricity  or  motive 
power  of  any  kind. 

(c)  Construction,     reconstruction,    maintenance,     repair,    alteration,    or 


PROBLEMS    OF   LABOR  39i 

demolition  of  any  building,  railway,  tramway,  harbor,  dock,  pier,  canal, 
inland  waterway,  road,  tunnel,  bridge,  viaduct,  sewer,  drain,  well,  telegraphic 
or  telephonic  installation,  electrical  undertaking,  gas  work,  water  work,  or 
other  work  of  construction,  as  well  as  the  preparation  for  or  laying  the 
foundations  of  any  such  work  or  structure. 

The  competent  authority  in  each  country  shall  define  the 
line  of  division  which  separates  industry  from  commerce  and 
agriculture. 

Article  2.  For  the  purpose  of  this  Convention,  the  term 
■'night"  signifies  a  period  of  at  least  eleven  consecutive  hours, 
including  the  interval  between  ten  o'clock  in  the  evening  and  five 
o'clock  in  the  morning. 

In  those  countries  where  no  Government  regulations  as  yet 
applies  to  the  employment  of  women  in  industrial  undertakings 
during  the  night,  the  term  "night"  may  provisionally,  and  lor  a 
maximum  period  of  three  years,  be  declared  by  the  Government 
to  signify  a  period  of  only  ten  hours,  including  the  interval 
between  ten  o'clock  in  the  evening  and  five  o'clock  in  the  morn- 
ing. 

Article  3.  Women  without  distinction  of  age  shall  not  be 
employed  during  the  night  in  any  public  or  private  industrial 
undertaking,  or  in  any  branch  thereof,  other  than  an  undertaking 
in  which  only  members  of  the  same  family  are  employed. 

Article  4.    Article  3  shall  not  apply: 

(a)  In  cases  of  force  majeure,  when  in  any  undertaking 
there  occurs  an  interruption  of  work  which  it  was  impossible  tu 
foresee,  and  which  is  not  of  a  recurring  character. 

(b)  In  cases  where  the  work  has  to  do  with  raw  materials 
or  materials  in  course  of  treatment  which  are  subject  to  rapid 
deterioration,  when  such  night  work  is  necessary  to  preserve 
the  said  materials  from  certain  loss. 

Article  5.  In  India  and  Siam,  the  application  of  Article 
3  of  this  Convention  may  be  suspended  by  the  Governm.ent  in 
respect  to  any  industrial  undertaking,  except  factories  as  defined 
by  the  national  law.  Notice  of  every  such  suspension  shall  be 
filed  with  the  International  Labor  Office. 

Article  6.  In  industrial  undertakings  which  are  influenced 
bj'  the  seasons  and  in  all  cases  where  exceptional  circumstances 
demand  it,  the  night  period  may  be  reduced  to  ten  hours  on  sixty 
days  of  the  year. 

Article  7.  In  countries  where  the  climate  renders  work  by 
day  particularly  trj'ing  to  the  health,  the  night  period  may  be 
shorter  than  prescribed  in  the  above  articles,  provided  that  com- 
pensatory rest  is  accorded  during  the  day. 


39-'  SLCLECTED    ARTICLES 

Recommendation  Concerning  the  Protection  of 
Women  and  Children  Against  Lead  Poisoning 

The  General  Conference  recommends  to  the  Members  of  the 
International  Labor  Organization  that  in  view  of  the  danger 
involved  to  the  function  of  maternit}'  and  to  the  pliysical  de- 
velopment of  children,  women  and  young  persons  under  the 
age  of  eighteen  years  be  excluded  from  employment  in  the  fol- 
lowing processes : 

(o)      In  furnace  work  in  the  reduction  of  zinc  or  lead  ores. 
(h)       In     the     nuinipiihition,     tieatmciU    or    reduction     of    ashrs    lonlain- 
ing    lead,    and    in    the    desilverizing    of    lead. 

(c)  In   melting  lead   or   old   zinc   on  a  large   scale. 

(d)  In  the  manufacture  of  solder  or  alloys  containing  more  than 
ten    per    cent    of    lead. 

(e)  In  the  manufacture  of  litharge,  massicot,  red  lead,  white  lead, 
orange    lead,    or      sulphate,      chromate    or      silicate    (frit)      of      lead. 

(/)  In  mixing  and  pasting  in  the  manufacture  or  repair  of  electric 
accumulators. 

(ff)  In  the  cleaning  of  workrooms  where  the  above  processes  are 
carried   on. 

It  is  further  recommended  that  the  employment  of  women 
and  young  persons  under  the  age  of  eighteen  years  in  processes 
involving  the  use  of  lead  compounds  be  permitted  only  suliject 
to  the  following  conditions : 

(o)  Locally  applied  exhaust  ventilation,  so  as  to  lemove  dust  and 
fumes    at    the   point    of   origin. 

{b)      Cleanliness  of  tools  and  workrooms. 

(c)  Notification  to  Government  authorities  of  all  cases  of  lead 
poisoning     and   compensation   therefor. 

(d)  Periodic  medical  examination  of  the  persons  employed  in  such 
processes. 

{e)      Provision     of     sufficicttt     and     suitable     cloakroom,     washing,     and 
mess-room    accommodatioUj    and    of    special    protective   clothing. 
(/)      Prohibition   of  brniging  food  or   drink  into   work   rooms. 

It  is  further  recommended  that  in  industries  where  soluble 
lead  compounds  can  be  replaced  by  non-toxic  substances,  the 
use  of  soluble  lead  compounds  should  be  strictly  regulated. 

For  the  purpose  of  this  Recommendation,  a  lead  compound 
should  be  considered  as  soluble  if  it  contains  more  than  five  per 
cent  of  its  weight  (estimated  as  metallic  lead)  soluble  iii  a 
quarter  of  one  per  cent  solution  of  hydrochloric  acid. 

Draft  Convention  Fixing  the  Age  for  Admission 
of  Children  to  Industrial  Employment 

Article  i.  For  the  purpose  of  this  Convention,  the  term 
"industrial  undertaking"  includes  particularly : 

(a)  Mines,  quarries  and  othfr  works  for  the  extraction  of  niineruls 
from   the   earth. 


PkOBLEAiS    OF    LABOR  39J 

(b)  Industries  in  which  articles  are  luauulactured,  altered,  cleaned, 
repaired,  ornamented,  finished  adapted  for  sale,  broken  up  or  demolished, 
or  in  which  materials  are  transformed;  including  shipbuilding,  and  the 
generation,  traiisiorauitiun,  ar.d  iiauijiiiission  oi  elcctncily  and  motive 
power   of   all    kinds. 

(c)  Construction,  reconstruction,  maintenance,  repair,  alteration  or 
demolition  ol  any  builUing,  railway,  tramway,  harbor,  dock,  pier,  canal, 
inland  waterway,  road,  tunnel,  bridge,  viaduct,  sewer,  drain,  well,  telegraphic 
or  telephonic  installation,  electrical  undertaking,  gas  work,  water  work, 
or  other  work  of  construction,  as  well  as  the  preparation  for  or  laying 
the    foundations    of    any    such    work   or    structure. 

(d)  Transport  of  passengers  or  goods  by  road  or  rail  or  waterway, 
including  the  handling  of  goods  at  docks,  quays,  wharves,  and  ware- 
bouses,    but    excluding    transport    by    hand. 

The  competent  authority  in  each  country  shall  define  the 
line  of  division  which  separates  industry  from  commerce  and 
agriculture. 

AiuiCLE  2.  Children  under  the  age  of  fourteen  years  shall 
not  be  employed  or  work  in  any  public  or  private  industrial 
undertaking,  or  in  any  branch  thereof,  other  than  an  undertak- 
ing in  which  only  members  of  the  same  family  are  employed. 

Article  3.  The  provisions  of  article  2  shall  not  apply  to 
work  done  by  children  in  technical  schools,  provided  that  such 
work  is  approved  and  supervised  by  public  authority. 

Article  4.  In  order  to  facilitate  the  enforcement  of  the 
provisions  of  this  Convention,  every  employer  in  an  industrial 
undertaking  shall  be  required  to  keep  a  register  of  all  persons 
under  the  age  of  sixteen  years  employed  by  him,  and  of  the 
dates  of  their  births. 

Article  5.  In  connection  with  the  application  of  this  Con- 
vention to  Japan,  the  following  modifications  of  article  2  may 
be  made : 

(a)  Children  over  twelve  years  of  age  may  be  admitted  into  em- 
ployment if  they  have  finished  the  course  in  the  elementary  school; 

(b)  As  regards  children  between  the  ages  of  twelve  and  fourteen 
already   employed,  transitional   regulations  may  be   made. 

The  provision  in  the  present  Japanese  law  admitting  chil- 
dren under  the  age  of  twelve  years  to  certain  light  and  easy 
employments  shall  be  repealed. 

Article  6.  The  provisions  of  article  2  shall  not  apply  to 
India,  but  in  India  children  under  twelve  years  of  age  shpil  not 
1)0  employed, 

(a)  In  manufactories  working  with  power  and  employing  more  than 
ten    persons; 

(b)  In  mines,  quarries,  and  other  works  for  the  extraction  of 
minerals   from   the   earth; 

(c)  In  the  transport  of  passengers  or  goods  or  mails,  by  rail,  or 
in  the  handling  of  goods  at  docks,  quayi,  and  wharves,  but  excluding 
transport    by    hand. 


3^4  SELECTED   ARTICLES 

Draft  Convention  Concerning  the  Night  IVork  of 
Young  Persons  Employed  in  Industry 

Article  i.  For  the  purpose  of  this  Convention,  the  term 
'industrial  undertaking"  includes  particularly: 

(0)  Mines,  quarries,  and  other  works  for  the  extraction  of  minerals 
from    the   earth. 

(6)  Industries  in  which  articles  are  manufactured,  altered,  cleaned, 
repaired,  ornamented,  finished,  adapted  for  sale,  broken  up,  or  demolished, 
or  in  which  materials  are  transformed;  including  shipbuilding,  and  the 
generation  transformation  and  transmission  of  electricity  or  motive  power 
of   any   kind. 

(1)  Construction,  reconstruction,  mainteance,  repair,  alteration,  or 
demolition  of  any  building,  railway,  tramway,  harbor,  dock,  pier,  canal, 
inland  waterway,  road,  tunnel,  bridge,  viaduct,  sewer,  drain,  well,  tele- 
graphic or  telephonic  installation,  electrical  undertaking,  gas  work,  water 
work,  or  other  work  of  construction  as  well  as  the  preparation  for  or 
laying  the  foundations  of  any  such   work  or  structure. 

(3)  Transport  of  passengers  or  goods  by  roads  or  rail,  including 
the  handling  of  goods  at  docks,  quays,  wharves,  and  warehouses  but 
excluding    transport    by    hand. 

Tlie  competent  authority  in  each  country  shall  define  the  line 
of  division  which  separates  industry  from  commerce  and  agri- 
culture. 

Article  2.  Young  persons  under  eighteen  years  of  age  shall 
not  be  employed  during  the  night  in  any  public  or  private  in- 
dustrial undertaking,  or  in  any  branch  thereof,  other  than  an 
undertaking  in  which  only  members  of  the  same  family  are  em- 
ployed, except  as  hereinafter  provided  for. 

Young  persons  over  the  age  of  sixteen  may  be  employed 
during  the  night  in  the  following  industrial  undertakings  on 
work  which  by  reason  of  the  nature  of  the  process,  is  required 
to  be  carried  on  continuously  day  and  night : 

(a)  Manufacture  of  iron  and  steel;  processes  in  which  reverbera- 
tory  or  regenerative  furnaces  are  used,  and  galvanizing  of  sheet  metal  or 
wire    (except   the   pickling  process). 

(b)  Glass   works. 

(c)  Manufacture   of   paper. 

(d)  Manufacture   of   raw  sugar. 

(e)  Gold   mining   reduction   work. 

Article  3.  For  the  purpose  of  this  Convention,  the  term 
"night"  signifies  a  period  of  at  least  eleven  consecutive  hours, 
including  the  interval  between  ten  o'clock  in  the  evening  and 
five  o'clock  in  the  morning. 

In  coal  and  lignite  mines  work  may  be  carried  on  in  the 
interval  between  ten  o'clock  in  the  evening  and  five  o'clock  in 
the  morning,  if  an  interval  or  ordinary  fifteen  hours,  and  in 
no  case  of  less  than  thirteen  hours,  separates  two  periods  of 
work. 


PROBLEMS   OF   LABOR  395 

V\  here  night  work  in  the  baking  industry  is  prohibited  for 
all  workers,  the  interval  between  nine  o'clock  in  the  evening  and 
four  o'clock  in  the  morning  may  be  substituted  in  the  baking  in- 
dustry for  the  interval  between  ten  o'clock  in  the  evening  and 
five  o'clock  in  the  morning. 

In  those  tropical  countries  in  which  work  is  suspended  dur- 
ing the  middle  of  the  day,  the  night  period  may  be  shorter  than 
eleven  hours  if   compensatory  rest  is  accorded  during  the   day. 

Article  4.  The  provisions  of  Articles  2  and  3  shall  not  apply 
to  the  night  work  of  young  persons  between  the  ages  of  sixteen 
and  eighteen  years  in  cases  of  emergencies  which  could  not  have 
been  controlled  or  foreseen,  which  are  not  of  a  periodical  char- 
acter, and  which  interfere  with  the  normal  working  of  the  in- 
dustrial undertaking. 

Article  5.  In  the  application  of  this  Convention  to  Japan, 
until  I  July,  1925,  Article  2  shall  apply  only  to  young  persons 
under  fifteen  years  of  age  and  thereafter  it  shall  apply  only  to 
young  persons  under  sixteen  j-ears  of  age. 

Article  6.  In  the  application  of  this  Convention  to  India, 
the  term  "industrial  undertakings"  shall  include  only  "factories" 
as  defined  in  the  Indian  Factory  Act,  and  Article  2  shall  not 
apply  to  male  young  persons  over  fourteen  years  of  age. 

Recommendation  Concerning  the  Establishment 
of  Government  Health  Services 

The  General  Conference  recommends  that  each  Alember  of 
the  International  Labor  Organization  which  has  not  already 
done  so  should  establish  as  soon  as  possible,  not  only  a  system 
of  efficient  factory  inspection,  but  also  in  addition  thereto  a 
Government  service  especially  charged  with  the  duty  of  safe- 
guarding the  health  of  the  workers,  which  will  keep  in  touch 
with  the  International  Labor  Office. 

Recommendation   Concerning   the  Application   of 
the  Berne  Convention  of  1906  on  the  Prohi- 
bition of  the  Use  of  White  Phosphorus  in 
the  Manufacture  of  Matches 

The  General  Conference  recommends  that  each  Member  of 
the  International  Labor  Organization,  which  has  not  already 
done  so,  should  adhere  to  the  International  Convention  adopted 
at  Berne  in  1906  on  the  prohibition  of  the  use  of  white  phos- 
phorus in  the  manufacture  of  matches. 


396  SELECTED   ARTICLES 

Recoimnendation  CGnccrning  the  Prevention  of  Anthrax 

The  General  Conference  recommends  to  the  Members  of  the 
International  Labor  Organization  that  arrangements  should  be 
made  for  the  disinfection  of  wool  infected  with  anthrax  spores, 
either  in  the  country  exporting  such  wool  or  if  that  is  not  prac- 
ticable at  the  port  of  entry  in  the  country  importing  such  wool. 


BRINGING   ABOUT   INDUSTRIAL    PEACE' 

There  is  no  automatic  method  of  bringing  about  indus- 
trial peace;  no  panacea  can  be  proposed.  The  Socialists  pro- 
pose a  panacea.  They  consider  that  the  conflict  of  capital  and 
labor  springs  from  the  historical  fact  of  private  property,  and 
that  if  private  property,  is  abolished  and  all  property  made  com- 
mon, then  there  will  be  harmony.  There  will  be  no  clashes  and 
no  conflict.  They  would  abolish  conflict  and  bring  about  in- 
dustrial peace  by  abolishing  private  property,  but  in  order  to 
accomplish  that  result,  they  must  also  abolish  liberty.  As  long 
as  there  is  hberty  there  will  be  strikes,  for  a  strike  is  nothing 
more  nor  less  than  liberty  to  stop  work  and  to  wait  for  a  bar- 
gain—it is  a  process  of  negotiation— it  is  a  scheme  of  withhold- 
ing your  property  until  you  can  agree  on  the  terms  of  exchange. 

The  principal  new  thing  about  this  situation  in  modern  in- 
dustry is  that  it  is  conducted  on  a  large  scale— much  more  than 
we  have  ever  known  before— and  that  is  because  there  is  more 
liberty  than  has  ever  been  known  before.  It  has  only  been  two 
generations  that  the  workman,  under  our  constitution,  has  been 
free.  We  have  a  new  situation.  The  liberty  of  labor  is  a  new 
phenomenon,  and  it  should  not  be  surprising  that  we  have  not 
learned  either  to  deal  with  the  institution  of  property  or  with 
the  liberty  of  the  working  man.    They  are  both  new  problems. 

I  do  not  propose  to  offer  any  panacea  because  it  is  im- 
possible to  offer  any  one  solution.  I  would,  however,  mention 
two  things  which  seem  to  me  impossible  in  the  direction  of  a 
solution  of  labor  problems  or  in  bringing  about  industrial  peace. 
Industrial  peace  cannot  be  brought  about  by  rough  methods. 
We  have  gone  through  considerable  discussion  of  compulsory 
arbitration,  and  there  has  been  a  considerable  reliance  on  the 
injunction  and  on.  threats.     These  rough  methods  are  breaking 

'  By  John  R.  Commons.  Address,  before  Conference  of  Employment 
Managers.  December  13,  1919.  Proceedings  of  the  National  Association 
of   Employment  Managers. 


PROBLEMS    OF   LABOR  397 

down.  \\\  may  put  the  leaders  in  jail,  we  may  prevent  them 
i'rom  using  the  mails  and  we  may  tie  up  their  funds,  but  if  be- 
neath what  the  leaders  are  doing  there  is  a  real  grievance,  a 
real  unrest  and  a  mass  movement,  we  cannot  permanently  sup- 
press it.  The  rough  method  has  about  reached  its  limit.  It  has 
failed  in  the  different  countries  where  it  has  been  tried,  and 
recent  events  in  this  country  seem  to  prove  that  we  cannot  re- 
sort to  the  rough  method  of  bringing  about  industrial  peace. 

Then  there  is  another  method  which  has  been  resorted  to 
more  or  less,  the  method  of  misrepresentation.  I  think  the 
greatest  offender  in  the  method  of  misrepresentation  is  the 
Lniitcd  States  Steel  Corporation.  They  flooded  this  country 
with  propaganda  of  Bolshevism  as  though  the  laboring  people 
of  the  United  States  who  are  demanding  the  aboUtion  of  the 
twelve-hour  day  and  the  seven-day  week,  were  animated  by  the 
desire  of  taking  possession  not  only  of  the  factories  of  the  Steel 
Corporation  but  of  all  factories.  Apparently,  they  succeeded  in 
that  propaganda  and  misrepresentation.  You  find  throughout 
the  country,  not  only  an  unrest  amongst  laborers  but  a  decided 
unrest  amongst  employers.  Employers  have  become  eas},'-marks 
— anybody  who  has  a  panacea  can  come  to  an  employer  and  lift 
$IOO  out  of  his  pocket-book  by  offering  him  a  remedy  against 
Bolshevism.  The  unrest  which  has  been  stirred  up  amongst 
employers  by  the  Steel  Corporation  in  its  wonderful  propaganda 
is  a  menace  to  the  industrial  peace  of  the  country.  Neither 
rough  methods  nor  misrepresentation  will  permanently  bring 
about  industrial  peace. 

If  we  cannot  rely  upon  these  methods  of  the  past,  what  is 
going  to  be  the  method  and  what  can  we  offer  as  a  remedy  in 
bringing  about  industrial  peace?  In  my  judgment,  the  method 
is  one.  not  of  a  year  or  two  years,  but  of  many  years.  It  is  the 
method  of  prevention.  W'e  must  investigate  the  conditions 
which  cause  this  industrial  unrest  and  we  must  prepare  in  ad- 
vance to  remove  the  conditions  which  cause  conflict  to  waken  up. 
Last  February  the  Administration  at  Washington  might  have 
known  what  was  going  to  happen  in  the  coal-mining  industry. 
The  Administration  had  all  of  the  means  of  knowing  how  many 
hours'  work  the  men  were  getting  in  the  week;  they  had  the 
means  of  knowing  that  after  the  Armistice  was  signed  employ- 
ment fell  off;  that  during  the  winter  months  and  on  through 
the  summer,  the  men  were  not  workimr  half  time,  or  two-thirds 
of  the  time;  that  in  the  winter  they  were  compelled  to  sell  their 
Liberty  Bonds;  they  were  compelled  to  eat. up  thir  savings  and 


398  SELECTED  ARTICLES 

there  was  great  suffering  in  many  parts  of  the  mining  districts. 
Anyone  who  attended  that  convention  of  the  mine  workers' 
opinion,  could  not  for  a  minute  conceive  that  tlieir  unrest  was 
ers  coming  up  out  of  the  ground  in  one  great  solid,  unanimous 
opinion,  could  not  for  a  minute  conceive  that  their  unrest  was 
the  work  only  of  agitators  and  leaders.  They  were  not  officials, 
they  were  not  the  salaried  leaders  defending  their  jobs.  They 
were  the  actual  mine  workers  sent  there  by  the  local  unions  to 
protest  against  conditions. 

They  made  a  great  statistical  blunder  and  perpetrated  an  eco- 
nomic fallacy.  Their  statistical  blunder,  owing  to  the  lack  of 
proper  statistical  information,  led  them  to  ask  for  an  increase 
of  60%  in  their  wages.  They  figured  it  out  accurately,  accord- 
ing to  the  light  which  they  had.  Their  statistician  had  figured 
that  their  cost  of  living  had  gone  up  about  104%,  whereas,  as  a 
matter  of  fact,  it  had  gone  up  only  80%— they  had  taken  whole- 
sale price  rather  than  retail  pric  s.  They  fi^uircd  their  wages 
had  gone  up  44%  and  they  wanted  another  60%,  and,  added  to 
the  44%  on  the  1914  basis,  that  would  have  brought  them  up 
exactly  even  with  the  cost  of  living. 

Their  economic  fallacy  was  based  on  the  idea  that  by  re- 
stricting the  hours  of  labor  to  six  they  could  force  industry 
to  equalize  employment  throughout  the  year.  The  impression 
was  generally  spread  over  the  country  that  what  they  intended 
to  do  was  to  restrict  the  output  by  cutting  the  hours  from  eight 
to  six.  We  all  know  now  that  what  they  were  really  trying  to 
do  was  to  distribute  the  work  evenly  through  out  the  year.  A 
man  working  in  a  coal  mine  often  does  not  know  until  the 
whistle  blows  in  the  evening  whether  there  will  be  work  to- 
morrow or  not.  When  he  goes  to  work  in  the  morning  he 
does  not  know  whether  he  will  have  two,  three,  four,  five,  or 
eight  hours  of  work.  Living  in  this  state  of  uncertainty,  not 
simply  for  the  year,  but  for  twenty  or  thirty  years,  the  mine 
worker  has  been  brought  up  on  the  conviction  that  each  time  he 
reduces  the  hours  of  labor,  he  forces  the  employer  to  distribute 
the  work  more  evenly.  He  is  not  asking  for  less  work,  he  is 
asking  for  steady  work. 

The  Administration  at  Washington  should  have  known  these 
conditions  and  circumstances.  They  had  the  correct  statistical 
information,  they  knew  the  conditions  in  the  industry,  and  at 
the  time  when  the  Administration  lifted  the  ban  on  the  oper- 
ators* price  of  coal,  they  should  havf  negotiated  with  the  oper- 
ators to  bring  about  an  adjustment  of  wages  so  as  to  meet  ac- 
curately the  cost  of  living. 


PROBLEMS    OF   LABOR  399 

This  iluctuation  of  prices,  this  changing  cost  oi  livi:ig,  has 
been  going  on  for  an  entire  century.  It  is  not  a  new  phenom- 
enon. One  hundred  years  ago,  at  the  close  of  the  Napoleonic 
wars,  we  had  the  same  situation.  We  had  it  again  in  the  'Thir- 
ties owing  to  wildcat  banking  at  that  time.  We  had  it  during 
the  Civil  War,  and  now  we  have  it  repeated.  We  have  had  in 
all  of  these  periods  quite  the  same  crude  explanation  of  the 
facts — the  rise  of  prices  has  always  been  charged  up  to  monopo- 
lies and  profiteering.  It  has  now  been  charged  up  to  restric- 
tions by  the  laborers.  It  may  be  true,  and  no  doubt  it  is,  that 
there  is  profiteering  and  that  there  is  "laying  down"  on  the  job 
by  wage  earners,  but  if  we  try  to  figure  how  much  influence 
either  profiteering  or  restrictions  by  labor  has  on  the  elevation 
of  prices,  I  think  we  will  have  to  conclude  that  if  we  could  stop 
all  of  the  profiteering  and  stop  all  of  the  restrictions  by  labor, 
it  would  not  aft'ect  the  total  result  very  materially.  Profiteering 
and  restrictions  are  mainly  results,  not  causes,  of  rising  prices. 
The  high  cost  of  living  is  something  that  neither  the  employer 
nor  the  employee  can  prevent.  It  does  not  come  from  anything 
under  the  power  of  capital  and  labor  to  overcome,  and  yet  it  is 
the  one  great  cause  of  uncertainty  and  unrest,  and  has  been  for 
a  whole  century. 

The  fluctuation  of  currency  is  the  greatest  of  all  the  labor 
problems.  It  throws  a  red  brick  continually  into  capital  and 
labor.  The  first  great  method  of  importance  in  bringing  about 
industrial  peace  is  the  stabilizing  oi  the  dollar.  If  we  can  have 
a  system  of  currency  in  which  the  great  fluctuations  which  have 
been  occurring  in  all  these  years  could  be  stabilized,  we  would 
do  more  to  stabilize  industry,  to  bring  about  industrial  peace, 
than  any  otlier  one  thing.  In  times  of  rising  prices  we  have  re- 
strictions, aggressive  movements ;  in  times  of  falling  prices, 
we  have  unemployment,  bankruptcy  and  depression.  The  whole 
situation  is  rendered  unstable  and  we  are  living  continuously  in 
a  period  of  uncertaint3'. 

I  know  of  no  way  of  reaching  that  question,  which  to  me 
seems  the  most  fundamental  of  all,  except  that  remedy  proposed 
by  Irving  Fisher,  of  stabilizing  the  dollar.  The  supply  of  gold 
and  paper  money  and  credit  has  increased  faster  than  the  sup- 
ply of  commodities  and  the  productions  of  labor.  If  that  sup- 
ply of  gold  and  paper  money  and  credit  increases  faster  than 
the  supply  of  commodities,  inevitably  we  shall  have  a  general 
increase  in  prices.    The  world  has  seen  again  this  great  inflation 


400  SELECTED   ARTICLES 

of  the  paper  money  of  the  world,  of  the  credit  sjstem,  of  the 
banking  system.  The  gold  of  Europe  has  come  to  this  country 
and  not  until  the  gold  begins  to  go  back  to  Europe,  not  until 
Europe  is  rehabilitated,  not  until  we  can  lend  credit  to  build  up 
Europe  again,  will  we  begin  to  get  back  to  a  stable  condition. 

It  would  perhaps  be  even  more  disastrous  if  we  should  figure 
on  having  in  the  future  a  return  of  prices  to  the  level  preced- 
ing the  w^ar.  It  is  bad  enough  to  have  them  go  up  as  they  have 
been  going,  but  it  will  be  even  worse  to  have  them  go  back 
again  to  the  level  of  1914.  All  of  the  enormous  debts  which 
have  been  accumulated  have  been  incurred  on  a  fifty-cent  dollar. 
It  would  certainly  depress  the  entire  civilized  world  if  we  should 
try  to  pay  off  those  debts  on  a  dollar  which  is  worth  one  hun- 
dred cents.  It  is  far  better  to  contemplate  a  perpetual  high  level 
of  prices,  a  continuous  and  new  basis,  rather  than  go  through 
a  period  of  depression  like  that  which  followed  the  Civil  War 
and  the  panic  of  1873  down  until  1879. 

It  is  better  for  the  world  to  get  together  on  some  plan  tike 
that  proposed  by  Irving  Fisher.  If  the  dollar  is  unstable,  the 
way  to  stabilize  it  is  to  change  the  amount  of  gold  that  is  in  the 
dollar.  If  prices  go  up,  that  means  that  the  dollar  is  getting 
cheap — that  means  we  ought  to  put  more  gold  into  it,  and  that 
will  tend  to  keep  the  general  level  of  prices  from  rising.  If 
prices  arc  going  down,  the  dollar  is  getting  dear,  and  we  need 
to  take  a  little  of  the  gold  out  of  it.  Convert  all  of  the  gold  m\o 
bullion;  change  the  amount  of  gold  in  the  dollar  every  month 
according  to  the  movement  of  prices ;  check  a  too-rapid  increase 
and  restrain  the  decrease  in  prices  by  changing  the  amount  of 
gold  in  the  dollar,  and  then  circulate  the  bullion  certificates, 
which  we  are  practically  accustomed  to,  instead  of  the  gold  it- 
self. This  program  of  stabilizing  the  dollar  is  the  most  funda- 
mental of  all  problems  that  industry  can  consider.  We  are  not 
yet  seriously  considering  it  but  it  lies  underneath  all  of  our 
problems. 

Yet  we  know  that  a  remedy  of  this  kind  will  not  be  coining 
very  soon.  Consequently,  the  best  that  can  be  done  is  for  em- 
ployers and  employees  to  adjust  themselves  to  that  situation. 
We  must  adjust  ourselves,  because  capital  and  labor  cannot  pre- 
vent this  fluctuation. 

I  know  of  only  one  great  constructive  plan  in  this  country 
(there  may  be  others)  on  a  national  scale  which  has  attempted 
to  bring  about  industrial  peace  by  meeting  the  situation  of  the 
currency,  and  that  is  the  plan  which  is  now  being  worked  out  in 


PROBLEMS    OF   LABOR  4.H 

the  book  and  job  printing  business  with  the  labor  organizations. 
With  this  increased  cost  of  hving,  the  priming  business  did  not 
raise  wages.  They  had  their  agreements  that  had  not  expired 
and  did  not  provide  for  raising  wages.  But  in  two  or  three 
places  in  the  country,  in  New  York,  Chicago  and  Seattle,  the 
local  unions  violated  their  agreements  and  went  after  the  in- 
creased wages  by  direct  action.  And,  although  the  employing 
printers  contended  that  they  could  not  pay  the  increase,  yet 
when  they  came  to  it,  they  not  only  paid  the  increase  but  they 
paid  more  than  the  increased  cost  of  living.  The  only  places  in 
the  United  States  w^here  labor  actually  secured,  in  the  book  and 
job  printing  business,  an  increase  in  wages  corresponding  to  the 
increase  in  the  cost  of  living,  was  where  the  local  unions  defied 
their  own  national  unions.  What  a  lesson  that  was  to  labor  in 
the  United  States !  The  only  waj'  we  can  keep  up  with  the  cost 
of  living  is  by  violating  our  agreements,  by  resorting  to  meth- 
ods which  we  have  promised  not  to  adopt — by  defying  our  own 
organizations. 

Consequently,  we  find  that  the  book  and  job  printing  busi- 
ness has  come  together  on  a  national  scale  and  is  in  the  process 
of  adopting  the  principle  that  employers  will  not  w^ait  until  de- 
mands and  strikes  are  upon  them,  but  will  automatically  change 
the  level  of  wages  as  the  changing  price  curve  moves  up  or 
down.  Every  six  months,  or  at  periodic  intervals,  a  change  is 
proposed  to  be  made  throughout  the  entire  United  States,  on 
tlie  initiative  of  the  employer — not  waiting  for  labor  to  make 
the  demand,  and  thus  head  off  this  unrest  in  the  localities.  In 
doing  that,  the  employing  printers  throughout  the  United  States 
for  tlie  first  time  have  joined  with  the  national  organizations 
of  labor,  where  their  interests  arc  alike,  and  we  see  on  a  new 
national  scale,  the  largest  expansion  of  scientific  management, 
capital  and  labor  combining  to  look  ahead  to  the  future,  in  order 
to  prevent  industrial  conflict  by  remedying  the  conditions  in 
advance. 

Of  course,  v,  e  have  the  objection  that  if  an  increase  in  wages 
causes  prices  to  go  up,  and  if  an  increase  in  prices  provokes  a 
further  demand  on  the  part  of  labor  for  wages  to  go  up,  we 
have  that  vicious  circle.  But  that  vicious  circle  cannot  be 
avoided  as  long  as  we  have  inflation  of  currency.  If  we  had  a 
stabilized  dollar,  no  matter  what  the  relations  are,  the  prices  and 
wages  would  be  stabilized  in  accordance  with  the  general  level  of 
the  price  curve.  It  is  a  mistaken  view  that  it  is  this  pyramiding 
of  wages  and  prices  that  keeps  prices  up.    It  is  not  the  pyramid- 


402  SELECTED   ARTICLES 

ing  of  wages  and  prices !  It  is  tlie  intiation  of  the  world's  cur- 
rency, and  no  matter  what  adjustment  might  be  made  between 
employers  and  laborers,  a  correction  of  the  currency  of  the 
world  could  stabilize  prices  and  prevent  the  need  of  this  pyra- 
miding. That  is  the  first  and  most  important  fundamental  con- 
dition to  be  recognized  in  the  conflict  of  capita!  and  labor,  as  it 
appears  to  me. 

What  about  restrictions  of  output?  Everybody  knows  that 
in  good  times  working  people  "lay  down"  on  the  job,  no  matter 
whether  organized  workers  or  not.  People  do  not  work  as  hard 
in  good  times  as  they  do  in  hard  times.  We  have  the  curious 
paradox  that  in  good  times  when  we  ought  to  increase  the  out- 
put, labor  restricts  the  output,  and  in  hard  times,  when  we  don't 
v/ant  people  to  work  so  hard  and  increase  the  supply  of  produc- 
tion, then  is  when  they  work  the  hardest.  A  business  man  does 
not  conduct  his  busincs.s  in  that  way.  In  good  times,  when  prices 
are  going  up,  he  tries  to  increase  his  output;  in  hard  times, 
when  prices  are  falling,  he  tries  to  restrict  his  output — he  does 
not  buy  more  than  he  can  sell.  In  other  words,  labor  works  just 
the  opposite  of  business.  In  good  times,  when  prices  are  up, 
then  is  when  labor  "lays  down"  on  the  job  and  refuses  to  in- 
crease the  output  and  keep  up  the  supply.  In  hard  times,  when 
the  demand  has  fallen  off,  then  is  when  labor  works  the  hardest 
and  turns  out  the  most  production.  It  sureh'  seems  thnt  we  have 
been  going  on  a  wrong  hypothesis  in  dealing  with  labor.  It 
works  out  all  right  in  dealing  with  marketing  and  commodities, 
but  labor  seems  to  work  just  the  opposite. 

We  have  been  going  on  the  theory  that  in  order  to  get  effi- 
ciency, in  order  to  get  output,  in  order  to  get  laborers  to  work, 
there  must  be  some  kind  of  a  penalty  held  over  the  working  man 
—the  penalty  of  unemployment,  the  penalty  of  being  discharged 
if  he  does  not  work,  if  he  does  not  do  his  duty,  if  he  is  not  on 
bis  job.  It  is  then  that  he  suffer?  the  penalty  of  being  dis- 
charged from  his  job.  Our  method  has  been  the  rough  method 
of  disciplining  labor  by  the  penalty  of  imemployment. 

That  penalty  does  not  work  in  good  times ;  it  v/orks  too 
much  in  hard  times.  In  good  times,  the  workman  is  not  afraid 
of  unemplo^Tnent.  What's  the  use?  If  he  is  discharged,  he  can 
go  across  the  street  and  get  another  job.  In  hard  times,  when 
we  don't  want  so  much  produced,  then  he  works  hard  because 
he  is  afraid  of  imemployment.  and  cannot  go  across  the  street 
and  get  another  job.  The  psychology  of  labor,  both  in  good  and 
in   hard  times,   is   fundamentally  the  psychology  of  a  class   of 


PROBLEMS   OF   LABOR  403 

people  whose  life  is  insecure,  who  are  subject  to  rough  methods 
of  discipline.  We  cannot  understand  the  problem  of  dealing 
with  labor  unless  we  understand  that  fundamental  fact  of  in- 
security of  employment.  It  is  just  as  vicious  in  good  times  as  it 
is  in  hard  times.  In  good  times,  the  working  man's  high  wages 
are  an  injury  to  him— he  gets  too  much  money  and  he  does  not 
know  what  to  do  with  it,  and  spends  it  extravagantly— burns  it 
up— and  when  the  hard  times  comes,  he  has  nothing  to  fall  back 
upon.  The  fluctuation  of  earnings— great  earnings  in  good 
times,  falling  off  in  hard  times— is  demoralizing  to  the  character 
of  working  people. 

If  we  have  to  depend  upon  tlie  rough  method  of  discharge, 
for  getting  efficiency,  then  we  are  going  to  keep  labor  continually 
unstable  and  uncertain  and  the  character  of  the  working  man 
will  not  rise  to  the  occasion  of  modern  industry. 

Alodern  capitalism  is  not  based  upon  the  ownership  of 
physical  things.  We  might  see  much  of  our  machinery  and  our 
Iniildings  destroyed  by  earthquake  or  war,  but  we  all  know  that 
if  we  retain  the  credit  system  it  will  not  be  very  long  until  all 
of  our  machinery  and  buildings  are  restored.  We  usually  con- 
sider that  the  production  of  wealth  is  brought  about  by  the  union 
of  capital,  of  management  and  labor.  The  capital  is  the  phys- 
ical machinery  and  the  tools;  the  management  is  the  organizing 
element ;  and  labor  produces  the  physical  product.  The  three 
must,  indeed,  be  combined,  but  the  greatest  instrument  of  pro- 
duction, the  thing  that  really  produces  modern  wealth,  is  not 
physical  things,  is  not  labor,  is  not  management — it  is  confidence 
in  the  future— it  is  a  credit  system  based  on  the  expectation  of 
industrial  continuity,  an  expectation  that  debts  will  be  paid.  The 
capitalistic  system  is  security  of  expectations.  If  we  could  not 
offer  securitA-  to  the  investor,  we  micrht  still  have  production 
of  wealth.  Physical  things,  management  and  labor  might  go  on 
producing  wealth,  but  you  know  how  miTch  wealth  could  be  pro- 
duced if  it  were  not  for  our  credit  system.  Tlie  production  of 
wealth  would  fall  back  to  what  it  was  in  Colonial  times^no- 
body  could  ship  his  product  to  anybody  else,  and  we  would  not 
trust  one  another.  Capital  is  based  upon  security  of  expecta- 
tions. The  investor  has  confidence  that  his  investment  will  be 
returned  to  him,  that  promises  will  be  kept.  That  is  the  great 
producing  factor  in  modern  industrv'. 

Now,  capitalism  is  to  blame  because  it  has  not  offered,  as 
yet,  to  labor  that  security  of  the  job  which  it  has  offered  to  the 
investor?    in   the    security   of   their   investments.      Capitalism    is 


404  SELECTED   ARTICLES 

threatened  because  it  has  not  furnished  the  working  people  a 
similar  security  to  that  which  it  has  furnished  to  the  investors. 
The  working  men  are  getting  the  idea  throughout  the  world, 
that  the  elements  that  produce  wealth  are  the  working  men  and 
the  management,  and  we  iiave  the  Plumb  plan,  in  which  two 
million  workers  in  the  United  States  come  forth  to  oust  the 
credit  system  and  let  simply  management  and  labor  produce  the 
wealth  of  the  country.  Tliey  would  destroy  the  thing  upon 
which  the  credit  of  the  railroads  is  built,  because  they  think  thnt 
the  producing  elements  are  management  and  labor. 

Well,  that  is  much  the  same  idea  that  they  have  in  Russia 
and  that  is  the  fundamental  notion  of  modern  laboring  people 
spreading  throughout  the  world.  They  do  not  appreciate  that 
modern  capitalism  is  based  on  faith  in  the  future;  they  have 
not  themselves  been  given  that  same  security.  Capitalism  to 
them  is  autocracy  and  insecurity.  They  have  tried  to  get  se- 
curity by  rough  methods.  Trade  unionism,  closed  shop,  union 
shop,  and  so  on,  are  their  methods  of  obtaining  security  of  the 
job.  Not  until  the  capitalistic  system,  not  until  the  great  finan- 
cial interests  that  control  this  country,  have  learned  that  it  is 
just  as  important  to  furnish  security  for  the  job  as  it  is  to 
furnish  security  for  the  investment,  will  we  have  a  permanent 
provision  for  industrial  peace. 

We  have  only  begun  in  recent  years  to  try  to  establish  se- 
curity of  the  job.     The  first  effort  made  was  eight  or  ten  years 
ago  in  the  workmi'u's  compensation  law — the  accident  compensa- 
tion laM-.     That  was  the  first  comprehensive  effort  to  establish- 
ing security  for  the  job.    Unemployment  no  longer  damages  the 
man,  as  it  did,  who  is  hurt  during  employment.    The  next  step 
is  probably  the  similar  treatment  of  sickness— sickness  insurance. 
In  the  case  of  accident  compensation,  this  curious  thing  de- 
veloped—employers vigorously  fought  the  legislation  at  first  be- 
cause  it  was   going  to   increase   the   cost  of   production   and  the 
expenses  of  business.     But  after  the  law  was  enacted  and  the 
employers  were  compelled  by  law  to  pay  compensation,  they  in- 
troduced a  new  element  in  industry,  they  introduced   a   safety 
expert.     They  developed  a  new  department  of  industry.   I  kncAV 
of  an  establishment  that  figured  that  if  the  compensation  law 
was  enacted,  their  premium  on  insurance  would  increase  from 
$5,000  to  $22,000  a  year.     That  was  what  they  were  told  by  the 
insurance  people  and  by  their  claim  agent,  and  they  were  dread- 
fully scared.     After  the  law  was  enacted,  however,  they  changed 
their  claim  agent  into  a  safety  expert  and  the  very  first  year. 


PROBLEMS   OF   LABOR  405 

instead  of  paying  $22,000  for  compensation,  or  even  $5,000,  it 
only  cost  tliem  about  $2,500. 

The  accident  compensation  law  has  accomplished  the  first 
little  step  towards  giving  security  to  the  job.  It  has  shown  that 
the  only  way  to  establish  security  is  by  making  it  financially 
profitable.  And  so  we  shall  make  it  financially  profitable  to 
business  to  eliminate  unemployment  on  account  of  sickness,  on 
account  of  changes  in  seasons,  on  account  of  fluctuations  in 
business.  Labor  can  never  accomplish  this  result.  The  only 
possible  accomplishment  of  it  will  come  when  the  employer  puts 
in  his  personnel  department,  his  personnel  relations  department, 
his  safety  men,  his  welfare  men,  and  his  men  who  stabilize  em- 
ployment. We  know  that  employers  who  have  done  this  have 
made  their  jobs  regular — they  have  regularized  their  work. 

There  are  many  ingenious  methods  that  can  be  adopted.  Yet 
it  appears  to  me  that  we  cannot  get  the  large  capitalistic  in- 
terests awake  to  this  subject  of  stabilizing  employment  except 
that  the  Government  take  hold  of  it.  If  we  had  a  tax  on  un- 
employment of  $1.00  a  day  for  every  man  who  is  laid  off,  we 
should  find  that  capitalism  would  put  its  personnel  experts  at 
work  to  regularize  the  business,  and  they  would  have  no  tax  to 
pay  because  they  would  have  stabilized  the  work. 

The  fundamental  lines  along  which  industrial  peace  is  to  be 
brought  about  are  those  which  go  to  the  psi'chologj-  of  the  work- 
ing man  and  substitute  in  his  mind  something  like  that  which  we 
have  in  the  mind  of  the  investor.  The  employer  who  is  willing 
to  pay  compensation  for  unemployment,  who  is  willing  to  furnish 
what  the  working  man  needs,  knows  that  the  working  man  needs 
to  have  something  to  wait  for  and  needs  to  have  confidence  in 
the  future. 

I  visited  a  number  of  establishments  this  summer,  making 
a  special  study  of  the  circumstances  under  which  efikiency  had 
been  increasing  or  decreasing,  and  found,  notwithstanding  others 
were  complaining  about  labor  laying  down  on  the  job,  yet  in 
particular  establishments  output  had  increased.  What  is  the 
secret  of  it?  It  seems  to  me  that  in  all  of  these  cases  we  found 
this — a  new  principle  had  come  into  the  business — management 
had  obtained  a  new  view  of  labor,  and  I  may  contrast  it  by  the 
history  of  scientific  management. 

Mr.  Taylor,  as  you  know,  started  out  his  wonderful  develop- 
ment in  scientific  management  by  offering  to  the  industrial  work- 
ers a  chance  to  better  their  condition.  He  appealed  to  the  in- 
dividual worker.     But  the  modern  personnel   scientific  manage- 


4o6  SELECTED   ARTICLES 

ment  appeals  to  the  collective  interests  of  all  the  workers  in  the 
business.  It  is  beginning  to  recognize  that  the  working  man 
does  not  want  to  have  high  wages  for  himself  if  by  doing  so 
he  seems  to  deprive  his  fellow  workers  of  high  wages.  It  is  as 
though  we  are  upon  a  ship  on  the  ocean — there  is  only  a  limited 
amount  of  products  to  go  around;  the  man  who  saves  his  own 
life  and  let  the  others  go  down,  cannot  live  with  his  fellows  after- 
wards. So  it  is  with  the  modern  working  man — he  is  continually 
haunted  by  this  feeling  that  there  is  only  a  limited  product  to  be 
distributed,  and  consequently  even  the  better  ones,  when  ap- 
pealed to  individually  to  increase  their  wages,  cannot  stand  it 
to  go  ahead  too  far  amongst  their  fellow  workers.  If  they  get 
out  of  the  class  and  become  foremen  and  superintendents,  that 
is  one  thing,  but  to  stay  in  the  ranks  of  labor  and  to  earn  much 
more  than  the  others  earn  seems  to  be  taking  bread  out  of  their 
mouths. 

Modern  management  is  learning  to  deal  collectively  with  the 
workmen  in  the  shop;  whatever  one  worker  does  to  benefit  that 
shop  will  benefit  all  of  us — we  are  all  going  to  be  lifted  up  to- 
gether. We  are  not  going  to  set  working  men  competing  with 
each  other  and  try  to  get  one  ahead  of  the  others,  and  appeal 
only  to  his  self-interest.  That  was  all  right  in  times  past  when 
the  world  seemed  to  be  full  of  unoccupied  resources,  when  any- 
body could  go  out  and  get  all  he  wanted  and  yet  not  take  it  from 
anybody  else.  Now,  as  we  are  getting  closer  together,  as  busi- 
ness is  getting  on  a  large  scale,  the  man  who  gets  more  for 
himself  seems  to  be  taking  it  from  the  others,  and  so  we  have 
that  solidarity  of  labor  which  is  a  psychology  that  must  be  recog- 
nized by  all  management. 

That  psychology  should  be  combined  with  the  idea  that  the 
business  itself  is  the  place  where  we  shall  have  our  living,  our 
confidence  in  the  future.  I  visited  Mr.  Ford's  factory  recently. 
Mr.  Ford  does  not  have  an  idea  there  of  cultivating  the  efficiency 
of  his  laborers.  His  great  profit-sharing  system,  as  you  know, 
is  a  distribution  not  to  men  who  are  efficient,  in  order  to  increase 
the  output,  but  to  men  who  lead  a  "clean  and  wholesome"  life — 
they  get  the  profit.  The  men  who  do  not  lead  a  clean  and 
wholesome  life  do  not  get  profits.  John  D.  Rockefeller  says  that 
Ford's  plant  is  the  industrial  miracle  of  the  age.  Well,  the  Ford 
plant  is  the  psychological  miracle  of  the  age.  It  lias  not  gone 
after  efficiency  first;  it  has  gone  after  the  clean  and  wholesome 
life.  Efficiency  is  a  bv-product  of  the  clean  and  wholesome 
life. 


PROBLEMS   OF   LABOR  407 

When  I  visited  the  White  Motor  Company,  I  was  impressed 
with  the  fact  that  it  is  not  in  detailed  methods  of  piece  and 
honus  payments  that  they  try  to  reach  the  individual  and  in- 
crease his  production,  but  it  is  in  creating  the  conviction  in  every 
man  in  that  industry  that  that  is  his  industry,  that  the  future 
of  that  concern  is  his  future.  Thinking  and  planning  for  the 
future  is  the  White  Motor's  big  efficient  machinery  of  produc- 
tion, just  as  security  for  investment  is.  Get  capital  to  think  of 
the  security  of  the  job  and  it  begets  efficiency  of  labor.  We 
must  look  upon  efficiency  as  a  by-product  and  not  as  the  main 
thing. 

It  seems  to  me,  to  transfer  this  to  the  national  scale,  here  is 
where  capitalists  have  fallen  down.  Mr.  Gary  has  fallen  down 
representing  the  capitaHstic  system;  labor  organizations  have 
fallen  down;  Mr.  Gompers,  representing  trade  unionism,  has 
fallen  down;  the  politicians  have  fallen  down  in  bringing  about 
industrial  peace.  ^  Where  shall  we  look  for  any  people  in  the 
United  States  who  have  the  preventive  idea;  who  can  look  for- 
ward and  plan  for  the  future;  who  will  base  the  bringing  about 
of  industrial  peace  on  knowledge  of  labor  and  on  knowledge  of 
security?  We  must  look  for  it  in  placing  the  personal  relations 
department  ahead  of  the  engineering  and  commercial  depart- 
ments and  production  departments  of  industry.  It  is  only  in  the 
personnel  department  that  we  find  the  beginnings  of  true  scien- 
tific management,  the  department  of  scientific  human  relations, 
which  appreciates  and  knows  what  are  the  fundamental  things 
for  labor's  efficiency.  If  we  can  have  our  modern  industry  con- 
ducted as  a  personal  relations  industry,  above  the  commercial 
department,  above  the  engineering  department,  above  the  manu- 
facturing department,  above  the  production  department,  and  if 
we  could  bring  together  on  a  national  scale,  instead,  of  our 
great  financiers,  instead  of  our  great  labor  unions,  instead  of  our 
politicians,  if  we  could  bring  together  those  who  are  developing 
the  modem  personal  relations  method,  then  I  think  we  might 
work  out  some  plan  for  bringing  about  industrial  peace. 

Yet  it  is  because,  and  to  the  extent  that,  personal  relations  de- 
partments are  coming  to  recognize  some  form  of  collective  bar- 
gaining or  collective  government,  that  they  are  fit  to  come  for- 
ward as  national  leaders  at  this  time.  Socialism  has  no  need  of 
personal  relations  in  management  because,  according  to  Marx's 
theory,  "social  labor  power"  moves  on  to  its  historic  goal  regard- 

1  Referring  to  the  recent  Industrial  Conference  called  toe;ether  by 
President  Wilson,  which  split  on  the  question  of  collective  bargaining. 


4o8  SELECTED   ARTICLES 

less  of  tlie  individual  will.  Capitalism  had  no  need  of  personal 
relations  because  capitalism  was  but  adjustment  to  the  laws  of 
demand  and  supply  over  which  individuals  and  classes  have  no 
control.  But  with  our  great  corporations  and  associations  on 
the  one  hand,  and  organized  labor  on  the  other,  it  is  only  by 
a  science  of  collective  management  that  capital  and  labor  can 
work  in  harmony  and  security.  It  becomes  then  a  science  of 
political  economy  as  well  as  a  science  oi  business. 

The  science  of  political  economy  began  with  individual  bar- 
gaining. Adam  Smith,  its  founder,  in  1776,  laid  its  foundation, 
and  in  an  interesting  and  important  chapter  pointed  out  the  great 
evil  of  collective  action.  One  of  the  most  serious  things  that 
industry  had  to  contend  with,  was  association  of  capitalists. 
The  great  evil  of  an  association  of  capitalists  was  that  when 
they  combine,  they  deprive  the  minority  of  their  liberty.  The 
majority  vote  of  the  association  binds  the  minority.  Conse- 
quently, the  combination^the  association  of  capital  in  corpora- 
tions, was  condemned  by  him  as  intruding  upon  the  liberty  of 
the  individual.  He  even  went  so  far  as  to  condemn  social 
gatherings  of  merchants,  for  he  said,  "When  your  merchants 
come  together,  what  does  their  conversation  turn  to?  It  turns 
on  hatching  up  some  conspiracy  against  the  public." 

Adam  Smith  started  political  economy  upon  the  individualistic 
basis.  He  spoke  at  a  time  when  industry  was  throttled  by  gov- 
ernments. The  French  Revolution  overthrew  that  system.  The 
French  Revolution  was  an  attack  by  the  small  manufacturers 
and  merchants,  the  small  capitalists  and  workers,  against 
the  Government  and  the  governmental  regulations  of  the 
Lime.  One  of  the  great  statutes  of  the  French  Revolution 
was  that  statute  whicli  provided  that  no  association, 
cither  of  merchants,  manufacturers  or  laborers,  should  be  per- 
mitted. That  statute  stood  on  the  statute  books  of  France  until 
the  year  1884,  when  it  was  finally  repealed.  Meanwhile,  there 
had  grown  up,  unknown  to  Adam  Smith,  unknown  to  the  French 
Revolution,  our  modern  system  of  corporations.  When  it  came 
to  the  middle  of  the  nineteenth  centurj',  about  the  year  1850,  for 
tlie  first  time,  with  otn-  general  incorporation  laws,  it  was  made 
possible  for  any  association  of  capitalists  to  come  together  and 
form  a  legal  association  to  conduct  their  business.  Prior  to  that 
time,  the  only  way  in  which  you  could  form  a  corporation  was 
by  going  to  the  Legislature  and  asking  for  a  special  charter. 
With  the  general  incorporation  laws,  beginning  about  1850  in  this 
country,  it  became  possible  for  any  group  of  capitalists  to  get  to- 


PROBLEMS    OF   LABOR  409 

gethei-,  simpl}'  file  their  articles  with  the  Secretary  of  State,  and 
become  as  association.  That  violated  all  tiie  principles  of  po- 
litical economy  and  the  French  Revolution. 

The  modern  business  world  is  conducted  upon  the  principle 
of  association,  of  requiring  the  minority  in  a  group  to  submit 
to  the  will  of  the  majority,  and  if  one  person  happens  to  be  the 
principal  stockholder,  then  all  the  minority  obey  the  will  of  that 
one  person.  We  are  not  living  in  the  time  of  the  French  Revo- 
lution— we  are  hving  in  the  time  of  the  Russian  Revolution. 

It  differs  entirely  from  the  French  Revolution  in  that  it  is 
based  upon  the  principle  of  government  by  organized  labor — a 
scheme  first  propounded  seventy  years  ago  by  Karl  Alarx,  that 
this  capitalistic  system  must  be  overthrown  and  that  now  was 
the  time  for  working  men  of  the  world  to  unite.  Russia  has 
given  us  the  fruition  of  that  theory,  based  upon  the  organization 
of  labor. 

Our  Western  civilization  to-daj'  is  confronted  by  an  entirely 
different  situation.  At  the  time  of  the  French  Revolution  we 
had  a  new  world  opening  up,  to  which  the  oppressed  peoples 
might  escape.  This  has  been  going  on,  until  at  the  present  time 
this  new  world  is  pretty  well  occupied.  Great  corporations  have 
sprung  into  being.  The  natural  resources  are  controlled,  and  if 
the  working  man  is  to  have  any  opportunity,  he  cannot  secure 
it  by  going  West,  by  escaping  from  Europe  and  settling  on  the 
soil  of  America.  When  he  escapes  from  Europe,  he  comes  to 
America  and  works  for  a  corporation.  Capital  has  associated — 
the  law  has  made  universal  the  right  of  association  on  the  part 
of  capital.  And  with  the  working  man  coming  into  this,  new 
world,  with  the  resources  occupied,  without  any  homestead  law 
or  opportunities  to  become  independent,  he  can  secure  his  ad- 
vance only  as  he  works  with  the  thousands,  for  the  corporation. 

Furthermore,  the  small  employers  who  are  not  formed  in 
corporations,  are  more  and  more  uniting  in  associations.  We 
have  all  kinds  of  associations — associations  of  farmers ;  associa- 
tions of  merchants;  we  have  associations  of  independent  manu- 
facturers— they  are  formed  for  all  classes  and  purposes,  and 
they  are  recognized  in  law.  They  are  created  into  employers' 
associations,  operating  with  a  formal  policy  regarding  labor,  so 
that  the  modern  working  man  is  confronted  writh  a  situation 
where  associated  effort  is  the  rule  of  the  day;  where  employers 
have  compelled  employees  to  submit  their  individuality  to  the 
control  of  the  majority  in  these  associations  and  corporations. 

The  working  man  of  modern  life,   then,   is  imbued  largely 


410  SELECTED   ARTICLES 

with  these  ideas  which  have  reached  their  disastrous  victory  in 
Kussia.  He  is  welcoming  the  idea,  at  least  tojing  with  the  idea, 
that  by  grouping  together  in  associations  he  may  gain  from  his 
employers  that  which  he  cannot  get  by  escaping  to  the  natural  re- 
sources of  the  country.  And  whether  we  will  it  or  not,  whether 
we  wish  for  it  or  not,  the  working  men  of  modern  life,  insofar 
as  they  are  capable  of  organizing,  are  doing  so. 

It  is  not  a  theory  of  collective  negotiation  of  collective  gov- 
ernment that  we  are  confronted  with,  it  is  conditions  and  facts. 
They  are  combining  and  cooperating  more  and"  more,  and  the 
more  that  they  get  intelligence,  the  more  that  they  get  Ameri- 
canized, the  more  will  they  combine.  In  this  combination  of 
workingmen,  they  attempt  to  accomplish  through  collective 
powder  what  they  cannot  accomplish  as  individuals.  The  feeling 
of  solidarity  is  arising  amongst  them,  the  feeling  that  for  the 
large  majority  there  is  no  opportunity  for  themselves  as  indi- 
viduals except  as  they  move  upward  in  a  mass,  that  if  one  indi- 
vidual outdistances  the  others  he  is  injuring  the  other,  but  that 
if  he  uses  his  influence  in  bettering  his  own  condition  so  that, 
at  the  same  time,  it  will  lift  up  the  others,  then  that  is  a  desirable 
thing.  This  feeling  of  solidarity,  this  feeling  of  unity,  is  forcing 
him,  as  it  were,  throughout  the  Western  world  to  assert  what 
collective  power  he  can.  The  employer  who  starts  out  vv^ith  an 
idea  of  individual  bargaining  is  confronted  by  the  fact  that  he 
jjcrhaps  will  not  have  a  chance  to  enforce  his  ideas. 

There  are  two  classes  of  employers,  you  might  sav.  There  is 
that  class  of  employers,  corporations  or  individuals,  who  conduct 
their  business  in  such  a  superior  fashion,  who  have  such  per- 
sonal relations  developed  with  their  employees,  that  labor  has 
no  desire  to  force  a  collective  arrangement  upon  them.  There  is 
another  class  of  emploj'ers,  either  through  their  own  attitude  or 
through  the  stress  of  competition,  who  are  not  free  to  deal  with 
labor  on  these  higher  personal  relations.  Labor  organization 
has  not  come  into  existence  at  all  to  deal  with  that  first  class 
of  employers.  It  has  not  been  provoked  in  order  to  overcome 
any  resistance  on  their  part.  It  has  come  in  solely  in  order  to 
use  coercion  with  reference  to  the  other  class  of  employers.  The 
collective  dealing  which  we  are  considering  is  not  to  be  con- 
sidered universal — it  is  not  to  be  considered  as  applying  to  all 
employers  or  all  capitalists.    It  applies  only  to  those  who  need  it! 

Labor  organization,  however,  has  this  defect,  that  when  once 
it  has  started,  when  once  it  has  begim  to  apply,  it  stretches  out 


PROBLEMS   OF  LABOR  411 

to  reach  all  employers  in  a  competitive  area.  B\-  force  of  cir- 
cumstances it  brings  the  others  into  the  fold.  A  small  number 
of  employers  or  corporations  may  be  above  the  level,  but  a  large 
proportion  are  in  that  field  where  there  is  a  contest  and  a  conflict 
going  on. 

If  we  let  our  vision  pass  from  the  time  of  Adam  Smith  and 
the  French  Revolution,  when  individual  bargaining  was  the  ideal 
of  political  economy,  down  to  the  time  of  the  Russian  Revolu- 
tion, when  these  very  corporations  themselves,  although  they 
ha\'e  become  enormous,  are  treated  as  though  they  were  indi- 
viduals, if  we  allow  our  view  to  pass  over  this  country,  we  shall 
widen  our  comprehension  and  not  only  have  a  place  for  the  in- 
dividualism which  produced  the  French  Revolution,  but  will 
have  a  place  for  that  collective  idea  which  has  shown  itself  in 
the  Russian  Revolution. 


OCCUPATIONAL    HYGIENE 

INDUSTRIAL  LOSSES^ 

Industrial  work  as  directed  in  this  country  today  is  wasteful. 
With  all  the  inventive  genius  of  the  American— for  the  records 
of  the  Patent  Office  show  twice  the  output  in  inventions  of  any 
other  nation — the  fact  remains  that  production  is  unnecessarily 
costly.  There  are  reasons  for  this  inherent  in  the  factory  sys- 
tem as  now  managed.  But  there  are  other  reasons  which  arise 
out  of  a  false  economic  hypothesis  as  to  the  essential  require- 
ments of  cheap  production.  The  two  main  items  upon  which 
plant  managements,  seeking  to  reduce  costs,  have  concentrated 
their  attention  have  been  raw  materials  and  wage  rates,  with 
the  major  attention  given  to  the  later.  Most  industrial  contro- 
versies arise  out  of  wage  questions.  And  yet  there  is  enough 
waste  in  plant  management  today  to  permit  the  paynient  of  a  liv- 
ing wage  to  all  workers  and  to  grant  to  capital  a  fair  return  on 
its  investment.  It  is  to  the  interest  of  labor  to  urge  a  stoppage 
in  this  leakage  with  the  consequent  salvage  of  wasteful  expendi- 
tures, as  a  prerequisite  to  any  proposed  adjustment  of  wages  if 
such  adjustment  will  deny  to  the  workers  a  living  wage.  To 
anyone  interested  in  the  problem  of  industrial  hygiene,  certain 
items  of  this  loss  stand  out  conspicuously.  It  is  estimated,  on 
the  basis  of  numerous  surveys  into  sickness  among  workers,  that 
every  year  industry  in  the  United  States  loses  through  illness 
about  280,000,000  working  days.  This  represents  the  productive 
capacity  of  one  million  workers  working  an  entire  year  each. 
More  than  half  this  loss  is  unnecessary  and  is  due  to  prevent- 
able causes,  some  of  which  are  traceable  to  inefficient  health 
work  in  industrial  communities,  and  more  of  which  are  due  to 
working  conditions  which  injure  health. 

This  absentee  rate  due  to  sickness  does  not  represent  the  full 
loss  to  industry  resulting  from  absenteeism.  Independent  of  the 
legal  holidays  and  without  considering  the  seasonable  trades 
which   would   raise  the   rate   much   higher,   absenteeism    for   all 

1  By  Bernard  J  Newman,  Consulting  Hygienist,  U.  S.  Public  Heahli 
Service.      American    Federationist.      26:1032-4.      November,     19 19. 


414  SELECTED   ARTICLES 

causes  runs  from  60  per  cent  to  300  per  cent  more  in  different 
plants.  Thus  one  establishment  from  which  accurate  records 
have  been  obtained  from  the  time  sheets  shows  an  absentee  rate 
of  10,450  days  lost  per  year  per  1,000  workers;  another  shows 
a  rate  of  31,860  days  per  1,000  workers;  a  third  shows  a  rate  of 
19,310  days  lost  per  1,000  employees,  while  a  fourth  records 
21,410  days  lost  per  1,000  employes.  Although  the  daily  time 
sheet  contained  the  records  here  noted,  yet  the  management  in 
no  case  had  taken  the  record  off  and  did  not  know  the  drain 
of  such  absenteeism.  Few  industrial  plants  tabulate  their  rec- 
ords and  fewer  still  interpret  them  when  they  have  been  col- 
lected. Directing  a  large  force  of  engineers  and  medical  men  in 
plant  surveys  for  the  past  year  I  have  been  impressed  with  the 
lack  of  familiaritj'  shown  by  plant  managers  with  the  losses 
resulting  from  a  lack  of  continuity  of  employment.  Cost  engi- 
neering has  apparently  disregarded  the  big  human  factor  intro- 
duced by  hazardous  and  obnoxious  trades  and  processes  which 
cause  accidents  and  sickness  and  has  neglected  as  well  those 
personnel  problems  which,  lacking  attention,  increase  absent- 
eeism and  contribute  prominently  to  labor  turnover—a  costly 
inattention  in  that  the  production  capacity  of  the  plant  during 
operation  is  not  utilized,  production  processes  being  slowed  up 
when  the  progress  of  materials  is  interfered  with,  because  green 
hands  are  on  the  job  or  because  production  in  a  particular  line 
is  stopped  pending  the  return  of  the  worker.  In  the  relatively 
few  instances  where  these  factors  have  been  taken  cognizance  of 
and  provisions  made  to  reduce  turnover,  sickness  and  absent- 
eeism, the  determination  of  the  saving  resulting  thereby  could 
not  be  estimated  because  such  a  program  was  a  part  of  a  larger 
program  involving  the  introduction  of  a  more  democratic  prin- 
ciple in  shop  policies  and  management. 

It  is  to  the  interest  of  both  the  employer  and  the  employee  to 
eliminate  the  causes  which  produce  sickness  and  absenteeism ;  to 
the  employer  because  he  can  ill  afford  to  have  the  cost  of  pro- 
duction increased;  to  the  employee  because  he  can  not  afford  the 
wages  lost  nor  the  medicine  and  doctor's  bills  incurred,  let  alone 
the  more  remote  but  certain  effect  of  an  increase  in  the  cost  of 
living.  No  item  of  cost  in  production  is  borne  alone  bi'  the 
manufacturer;  he  passes  it,  or  as  much  of  it  as  the  market  will 
stand,  on  to  the  consumer.  The  workers  form  a  large  percent- 
age of  the  consumers.  Both  are  injured  when  the  supply  equals 
or  runs  short  of  the  demand,  thereby'  permitting  the  profiteer 
to  corner  the  market  and  to  force  prices  still  farther  up. 

It  is  to  the  best  interest  of  labor  to  see  that  a  provision  is 


PROBLEMS   OF  LABOR  415 

incorporated  in  all  agreements  made  with  plants  calling  for  tlae 
installation  of  the  latest  improvements  which  will  reduce  the 
number  and  severity  of  occupational  health  hazards.  Just  as  it 
is  to  labor's  interest  to  insist  upon  a  reduction  of  the  mechanical 
hazards.  The  toll  in  suffering  and  financial  loss  from  mechan- 
ical hazards  and  carelessness  alone,  approximating  in  deaths 
annually  about  an  eighth  of  a  million  persons  and  in  serious  in- 
juries about  2,000,000  more,  is  too  great  to  be  accepted  with  com- 
placency or  indifference. 

The  effect  of  all  processes  in  industry  upon  the  health  of  the 
workers  has  not  been  determined.  In  approximately  126  proc- 
esses dust  is  alleged  to  be  a  health  hazard,  while  in  650  processes, 
poisons  are  to  be  guarded  against.  For  most  of  these  definite 
engineering  and  other  preventive  measures  are  determinable. 
Where  such  installations  have  not  been  made  the  plant  is  alone 
to  blame  for  every  injury  and  every  case  of  poisoning  occurring 
therein  not  resulting  from  carelessness  on  the  part  of  the  em- 
ploye. Moreover  personal  service  facilities  of  a  sanitary  char- 
acter in  adequate  ratio  to  the  number  of  employes  are  not  fads 
but  definite  aids  to  the  maintenance  of  health.  Insignificant  as 
it  may  seem  to  those  not  working  on  health  problems,  the  place- 
ment and  upkeep  of  such  facilities  are  also  closely  related  to 
the  maintenance  of  health. 

However,  it  avails  little  if  the  employer  installs  safety  de- 
vices or  provides  personal  service  equipment  to  reduce  hazards, 
if  the  worker  fails  to  make  use  of  such.  The  most  difficult  prob- 
lem in  the  promotion  of  industrial  hygiene  is  how  to  overcome 
the  recklessness  of  workers  who  through  long  exposure  to  occu- 
pational hazards  have  become  blunted  to  their  danger  and  object 
to  the  use  of  safeguards  because  they  may  in  some  instances 
cause  inconvenience.  Experience  is  a  valuable  teacher,  but 
where  the  effect  of  such  experience  is  upon  the  delicate  mechan- 
ism of  the  human  body  or  brain  the  correct  interpretation  of  it 
can  not  be  made  by  one  untrained  in  physiology,  medicine  and 
kindred  sciences.  Hence  the  unreliability  of  the  witness  who  so 
glibly  states  that  "I  have  w^orked  here  for  20  years  and  have  not 
been  made  sick;  there  is  no  harm  in  this  job."  Industry  today, 
with  the  increased  responsibility  forced  upon  it  by  changed 
world  trade  conditions,  can  ill  afford  to  ignore  industrial  sani- 
tation and  its  indices,  sickness,  absenteeism,  and  labor  turnover; 
and  the  industrial  worker  can  still  less  afford  to  be  indifferent 
toward  or  superior  to  the  use  of  safeguards  provided  or  which 
should  be  provided  for  his  protection  and  for  the  increase  of 
his  efficiency. 


^i6  SELECTED   ARTICLES 

INDUSTRIAL  PHYSIOLOGY,  A  NEW 
SCIENCE^ 

Industrial  physiology  has  two  objects:  First,  the  more  purely 
scientific  one  of  learning  how  the  industrial  worker  actually  per- 
forms his  work  and  what  the  conditions  are  under  which  he  can 
work  most  efficiently  and  can  produce  the  largest  output  while 
at  the  same  time  maintaining  his  body  in  health  and  in  the  best 
working  condition;  and,  secondly,  the  more  practical  object  of 
establishing  in  the  factories  the  conditions  which  conduce  at  the 
same  time  to  the  maximum  output  and  the  maintenance  of  the 
maximum  power  of  the  worker.  The  former  of  these  two  ob- 
jects is  now  being  achieved;  the  latter  will  be  achieved  when  it 
becomes  clear  to  both  employers  and  workers  that  it  is  to  the 
advantage  of  both  that  industrial  work  be  organized  on  a  really 
intelligent  basis  and  not,  as  heretofore,  on  a  basis  of  ignorance 
of  how  the  worker  can  do  his  best. 

The  methods  by  which  industrial  physiology  is  being  de- 
veloped arc  the  recognized  methods  of  all  scientific  investigation, 
namely,  observation  and  experiment.  The  investigations  are 
carried  on  chiefly  in  the  factories,  the  workers  being  used  as 
the  subjects  and  imder  their  actual  working  conditions,  these 
conditions  being  changed  when  it  is  desired  to  compare  the  effi- 
ciency of  one  set  of  conditions  with  that  of  another.  Exact  mea- 
surements of  output  are  made,  and,  where  it  is  possible,  exact 
tests  of  the  phj-siological  effects  of  the  work  are  employed. 

Some  of  the  topics  that  have  been  or  are  being  investigated 
and  some  of  the  results  are  the  following: 

Certain  physiological  and  psychological  tests  have  been  em- 
ployed with  workers,  and  it  appears  practicable  to  employ  some 
of  these  tests  in  selecting  workers  and  assigning  them  to  their 
jobs. 

The  output  of  the  successive  hours  of  the  working  day  in 
different  types  of  operations  has  been  measured,  and  the  daily 
curves  of  the  output  have  been  plotted.  These  vary  with  the 
kind  of  operation,  but  are  alike  in  showing  a  redticed  efficiency, 
indicating  a  growing  fatigue  as  the  day  proceeds. 

Reduction  in  the  length  of  the  working  day  is  characterized 

'  From  the  new  ."science  of  industrial  physiology,  by  Frederic  S.  Lee, 
Ph.  D.,  LL.  D.,  professor  of  physiology  in  Colnmbi.T  University.  Public 
Health  Reports  for  April  ii.  igio,  pp.  733-738.  United  States  Public 
Health  Service  Washington.  Reprinted  in  the  T^Ionthly  Labor  Review. 
0:002-4.      September,    1910. 


PROBLEMS   OF  LABOR  417 

by  an  increase  in  the  output  of  the  successive  hours  and  usually 
by  a  total  increase  in  that  of  the  day.  The  optimum  duration  of 
work  probably  varies  with  the  character  of  the  work  itself. 

The  introduction  of  resting  periods  in  the  working  spell  is 
accompanied,  especially  where  the  working  day  is  long,  b}  a 
total  increase  in  the  days  production.  A  five-hour  working 
spell,  unbroken  by  resting  periods,  is  probably  always  too  long. 

Overtime  following  a  day  of  labor  is  inadvisable,  as  is  also 
Sunday  work  following  a  week's  labor.  These  tend  to  impair 
the  worker. 

A  hot  day  tends  to  impair  strength  and  reduce  output.  Every 
effort  should  be  made  to  keep  the  body  of  the  worker  cool. 

Night  work  is,  in  general,  less  efficient  than  daywork.  Its 
total  output  is  less,  and  this,  with  a  long  working  night,  falls  off 
enormously  in  the  early  morning  hours.  Alternation  of  periods 
of  night  work  with  periods  of  daywork  is  more  profitable  than 
continuous  night  work. 

Women  are  capable  of  performing  a  much  greater  variety 
')f  industrial  operations  than  has  heretofore  been  recognized 
They  should  not  be  emploj'ed  for  night  work.  Statistics  show 
that  they  are  absent  from  their  work  more  frequently  than  men. 
The  problem  of  women  as  compared  with  men  in  industry  is  not 
that  of  their  greater  or  less  efficiency,  but  rather  a  problem  of 
what  types  of  work  each  sex  is  best  fitted  for. 

Accidents  to  workers  are  a  grave  source  of  inefficiency. 
They  are  caused  by  fatigue,  inexperience,  speed  of  working,  in- 
sufficient lighting,  high  temperature,  and  other  factors.  Many 
industrial  accidents  are  preventable,  and  adequate  provisions  for 
first-aid  measures  tend  to  diminish  the  seriousness  of  accidents. 

Food  and  efficiency  are  directly  connected  with  one  another, 
and  suitable  and  adequate  food  can  probably  be  best  provided 
through  the  establishment  of  industrial  canteens. 

A  high  labor  turnover  is  incompatible  with  the  highest  degree 
of  efficiency.  It  is  expensive,  in  that  it  imposes  upon  the  em- 
ployer the  necessity  of  training  new  workers,  and  it  is  a  serious 
factor  in  causation  of  accidents. 

Physiological  analyses  of  certain  operations  have  been  made 
bj'  means  of  the  cinematograph  and  other  methods,  and  it  has 
been  found  possible  to  eliminate  unnecessary  motions  and  to 
train  workers  so  as  to  secure  a  more  regular  rhythm,  such  mea- 
sures increasing  efficiency. 


4i8  SELECTED  ARTICLES 

The  self-limitation  of  work  on  the  part  of  workers  has  been 
studied  and  found  to  be  very  common.  Every  legitimate  effort 
sliduld  be  employed  by  foremen  and  managers  to  eliminate  this 
and  to  induce  workers  to  work  up  to  their  physiological  capacity. 
Driving  workers  beyond  their  physiological  capacity  defeats  its 
own  ends. 

Note  :  The  results  of  the  study  of  industrial  physiology  so  tar 
have  been  sufficientlj^  encouraging  to  lead  to  the  provision  of 
support  tor  their  continuance  in  several  countries  both  by  Gov- 
crinnciit  and  by  private  endowment.  In  Great  Britain  investi- 
gations begun  by  the  Health  of  Munition  Workers  Committee 
are  being  carried  on  under  the  new  Industrial  Fatigue  Research 
Board  which  was  appointed  jointly  by  the  Departments  of 
Scientific  and  Industrial  Research  and  the  Medical  Research 
Committee  and  which  has  formulated  an  ambitious  and  far- 
reaching  plan  for  future  investigations.  The  Municipal  Tech- 
nical College  of  Victoria  University,  Manchester,  has  established 
a  department  of  industrial  administration,  of  which  Prof.  Stanley 
Kent,  who  has  been  carrying  on  an  independent  investigation  of 
some  phases  of  industrial  fatigue  during  the  past  three  years, 
is  director. 

While  France  has  not  yet  taken  definite  steps  toward  the 
establishments  of  such  a  center,  the  work  will  probably  not  be 
long  delayed,  as  such  a  plan  of  research  had  been  outlined  by 
the  Marey  Institute  of  Paris,  under  the  directorship  of  Prof. 
Richet  and  the  subdirectorship  of  Dr.  Bull,  just  before  the  war 
made  its  immediate  realization  impossible. 

In  the  United  States  the  Public  Health  Service,  with  the  co- 
operation of  the  committee  on  fatigue  in  industrial  pursuits  of 
the  National  Research  Council  and  the  committee  on  industrial 
fatigue  of  the  Council  of  National  Defense,  has  been  conduct- 
ing investigations  within  the  scope  of  industrial  physiology  dur- 
ing the  past  l8  months  and  a  report  on  them  is  promised  in  the 
near  future.  Harvard  University  has  recently  established 
'-nurses  in  industrial  health,  through  the  financial  support  of  a 
group  of  manufacturers.  These  are  under  the  direction  of  a 
committee  on  industrial  hygiene  and  are  affiliated  with  the  pub- 
lic-henlth  work  of  Harvard  University  and  the  Massachusetts 
Institute  of  Technology.  Johns  Hopkins  Universit\',  through  its 
recently  founded  School  of  Hygiene  and  Public  Health,  also  is 
expected  to  initiate  work  along  similar  lines. 


WOMEN  IN  INDUSTRY 

THE  NEW  SPIRIT  IN   INDUSTRY' 

Helen  Frazer,  writing  of  Women  and  War  Work,  especially 
in  Great  Britain  in  the  midst  of  the  war,  said,  "We  know, 
though  we  do  not  often  define  it,  that  the  forces  we  women 
fight  in  the  enemy  are  the  forces  that  have  left  women  out  in 
world  affairs." 

If  this  be  true,  as  a  description  of  the  forces  which  the 
allied  nations  were  opposing  during  the  war,  it  is  true  now  that 
the  war  is  over,  that  one  of  the  most  important  tests  of  the 
philosophy  and  the  understanding  of  the  nations  that  have  taken 
part  in  that  conflict  will  be  their  attitude  toward  women  in  in- 
dustry, and  more  broadly  their  attitude  toward  the  economic 
position  of  women. 

The  position  of  women  in  society  in  an  industrial  age  can- 
not be  determined  apart  from  their  economic  position.  It  is 
based  upon  a  recognition  of  their  normal  relation  to  economic 
life.  But  on  that  subject  there  is  no  agreement;  there  is  a  con- 
flict of  opinion,  a  conflict  of  forces,  even  in  those  nations  which 
have  been  on  the  liberal  side  in  this  world's  war. 

Moreover,  the  questions  concerning  women  in  industry  are 
part  of  that  big  question  which  we  call  the  "labor  problem"  and 
constitute,  therefore,  not  merely  the  center  of  conflicting  views 
regarding  the  economic  position  of  women,  but  also  a  vital  part 
of  that  other  conflict  which  gives  rise  to  a  different  alignment 
of  groups  in  accordance  with  their  own  philosophy,  and  their 
special  interests. 

Under  the  circumstances,  it  is  difficult  to  find  a  common 
basis  for  action  if  we  are  really  dealing  with  the  fundamental 
aspects  of  this  question.  It  is  well  to  remember  that  common 
interests  always  lie  deep,  and  that  conflicts  and  diverging  in- 
terests are  in  plain  view  on  the  surface.  The  common  interests 
in  any  problem  in  which  there  is  such  a  conflict  can  be  pene- 

"^  By  Mary  A.  Van  Kleeck,  Former  Director,  Women  in  Industry  Ser- 
vice, U.  S.  "Department  of  Labor.  Address  delivered  before  the  Toledo 
Consumers   League.      May  3,    1919. 


420  SELECTED   ARTICLES 

irated  only  by  the  illumination  of  genuine  faith  in  the  over- 
whelming importance  of  the  common  welfare.  In  no  other  way 
can  a  true  solution  be  found  in  labor  disputes.  VVe  arc  chal- 
lenged by  the  labor  problem  to  a  concrete  expression  of  faith  in 
the  common  welfare  as  our  unwavering  aim  and  allegiance. 
Such  a  point  of  view  commits  us  to  no  easy  solution  and  no 
glib  and  well-rounded  conclusions. 

It  is  the  hope  of  America  that  our  democracy  is  founded 
upon  equality  of  opportunity  for  all  citizens  to  share  in  the  com- 
mon life.  The  challenge  today  to  America  is  to  demonstrate 
that  common  action  for  the  common  good  is  possible  in  industry. 
Only  by  penetrating  below  the  surface  of  the  preoccupations  and 
the  prejudices  of  special  interests,  can  an  alliance  be  formed  of 
all  those  who  believe  that  the  most  important  aim  in  our  democ- 
racy is  the  common  welfare.  Good  faith  in  allegiance  to  the 
true  spirit  of  democracy  is  the  common  basis  of  action  for  all 
groups,— employers,  workers  and  all  other  citizens. 

But  good  faith  is  not  to  be  realized  in  a  spirit  of  easy 
acquiescence.  When  we  talk  about  good  will  and  good  faith 
in  the  labor  problem  today,  we  are  not  summoning  men  to  a  love- 
feast  of  harmony,  assuming  an  identity  of  all  their  interests. 
Both  groups  are  challenged  rather  to  a  firm  insistence  upon  the 
social  interests  of  the  whole  community,  and  it  is  a  challenge, 
moreover,  that  may  involve  conflict,  just  to  the  extent  that  an 
insistence  upon  the  common  welfare,  as  opposed  to  the  interests 
of  any  one  group,  may  demand  conflict.  At  times,  the  common 
interests  will  be  more  closely  allied  lo  the  interest  of  one  groui- 
than  to  that  of  the  other,  but  the  touchstone  of  any  policy  will 
be  its  identity  with  the  common  good,  and  in  achieving  it,  the 
sacrifice  of  special  interests  may  often  be  inevitable. 

Now  women  in  industry  illustrate  all  of  the  difficulties  of 
these  disputed  questions.  A  word  about  the  facts,  as  they  have 
been  shown  in  the  experience  of  the  war,  may  afford  a  basis  for 
clearer  understanding.  For  the  first  time,  during  the  war,  ex- 
plicit recognition  has  been  given  by  all  civilized  nations  to  the 
essential  national  importance  of  women's  work,  especialh^  wo- 
men's work  in  industrial  production.  In  a  ciiicial  period  of  the 
war,  it  was  the  War  Department  in  Great  Britain  which  de- 
clared that  without  the  extension  of  the  employment  of  women, 
England  could  not  hope  to  win  the  war.  In  our  own  country  for 
the  first  time  the  national  government  recognized  the  prime  im- 
portance of  women's  work  by  creating  federal  agencies  to  deal 


PROBLEMS    OF   LABOR  .|2i 

with  the  problems  of  women's  work,  and  the  very  first  depart- 
ment in  which  such  an  agency  was  created  was,  significantly 
enough,  the  Ordnance  Department,  which  had  the  biggest  pro- 
duction program  of  any  single  division  of  the  War  Department. 
Faced  with  a  production  program  of  outstanding  importance, 
the  Ordnance  Department  was  obliged  to  take  cognizance  of 
labor  conditions  as  a  phase  of  production,  and,  moreover,  to 
recognize  the  importance  of  women's  work  as  necessary  in  pro- 
duction. That  is  to  say,  the  first  recognition  of  women's  work 
through  the  establishment  of  a  definite  agency  in  the  federal 
government  came  not  primarily  in  order  to  protect  women  work- 
ers, but  it  came  in  order  to  insure  the  most  effective  use  of  their 
energies  as  a  normal  and  necessary  part  of  the  productive  forces 
of  the  nation. 

In  the  experience  gained  through  thus  recognizing  their  im- 
portance, a  new  support  was  given  to  many  of  the  claims  which 
had  been  pressed  before  the  war,  for  shorter  hours  and  for  a 
fairer  basis  of  determination  of  wages.  The  question  of  hours 
of  work  was  necessarily  viewed  during  the  war  as  a  problem  of 
production,  because  production  was  most  vital  to  the  life  of 
the  nation.  From  production  was  derived  the  power  of  the  na- 
tion to  do  its  part  in  the  battle  for  civilization.  In  the  course 
of  finding  out  what  conditions  made  for  maximum  production, 
it  became  clearer  and  clearer  both  abroad  and  in  this  country 
that  there  were  many  things  we  did  not  know  and  had  not 
known  before  the  war  about  the  meaning  of  hours  of  work. 
Before  the  war  many  conflicts  in  industry  and  much  loss  of 
valuable  time  and  energy  and  working  days  had  resulted  from 
disputes  as  to  whether  ten  hours  should  prevail,  because  a  day 
of  ten  hours  was  the  practice  in  industry,  or  whether  a  day  of 
nine  or  eight  hours,  which  was  being  demanded  by  the  workers, 
should  be  inaugurated.  The  usual  method  of  settlement  was 
the  cessation  of  work, — the  contest  of  power  between  the  two 
eroups  who  believed  their  interests  on  this  point  to  be  opposed. 

During  the  war  we  could  not  decide  so  important  a  question 
merely  on  the  basis  of  the  relative  strength  of  conflicting  in- 
terests, because  the  essential  interest  of  the  nation  was  in  maxi- 
mum production  and  its  was  recognized  as  entirely  possible  to 
say  "We  will  use  science  in  this  conflict  and  we  will  determine 
facts."  When  Great  Britain  was  faced  with  a  shortage  of  shells, 
the  Ministry  of  Munitions  appointed  a  Committee  on  the  Health 
of  Munition  Workers,  and  that  committee  bv  studies  of  actual 


422  SELECTED   ARTICLES 

outpul  hour  by  hour  brought  in  reports  in  which  they  said,  first 
of  all,  that  a  weekly  day  of  rest  must  be  allowed  if  niaximum 
output  was  to  be  maintained  for  any  length  of  time.  The}-  tlien 
went  on  to  show  in  later  reports  that  working  twelve  hours  a 
day  meant  less  production  than  working  ten  hours  a  day.  They 
discovered  evidence  of  the  necessity  for  the  "physiological  bal- 
ance," which  meant  that  the  workers  who  went  to  work  in  the 
morning  facing  a  twelve-hour  day,  produced  less  in  the  first  ten 
hours  of  that  twelve  hour  day  than  if  their  day  were  determined 
from  the  beginning  as  ten  hours. 

Moreover,  as  the  war  went  on,  it  was  shown  that  the  first 
reports  were  very  conservative.  The  Committee  did  not  even 
declare  that  there  should  never  be  any  longer  working  period 
than  eleven  or  twelve  hours.  But  each  subsequent  study  made 
by  that  committee,  appointed  as  it  was  by  the  Ministry  responsi- 
ble for  producing  munitions,  indicated  the  need  of  a  still  further 
shortening  of  hours.  The  reports  showed  very  clearly  that  by 
experiment  unexpected  things  were  discovered.  It  had  been 
commonly  accepted  as  true  that  if  the  individual  effort  were 
the  prime  consideration  in  a  particular  job,  fatigue  would  mean, 
of  course,  that  the  output  of  that  job  would  be  decreased,  but  it 
was  discovered  in  Great  Britain  that  even  in  an  automatic 
process  where  it  is  merely  a  question  of  tending  a  machine,  out- 
put was  more  satisfactory  under  a  shorter  hour  arrangement. 
In  automatic  operations,  irregularity  of  attendance  came  into 
play  and  the  necessity  for  keeping  machines  in  motion,  satis- 
factorily attended  during  the  full  working  period,  brought  us 
back  again  to  the  fact  that  upon  human  conditions, — the  physical 
condition  of  the  workers, — depended  the  output  of  shells  for  the 
army  in  France. 

Moreover,  such  circumstances  as  crowded  or  irret^ular  street 
car  service,  or  the  lack  of  hot  food  at  lunch,  or  crowded  living 
conditions,  or  inadequate  housing,  were  nil  reflected  in  the  actual 
quality  and  quantity  of  cartridges  and  big  puns  that  could  he 
sent  from  British  factories  across  the  channel  to  France.  In 
the  same  way  in  our  own  countrj'  some  important  plants  were 
not  securing  the  expected  production,  and  it  was  reasonable  to 
trace  a  connection  between  the  eflfort  to  keep  the  force  working 
ten  hours  a  day  and  sixty  hours  a  week,  and  the  downward 
trend  of  the  curve  of  production  as  it  was  measured  by  the  stat- 
isticians in  the  Ordnance  Department,  who  were  watching  that 
curve  as  the  very  lifeblood  of  the  nation.     They  could  not  keep 


PROBLEMS    OF   LABOR  4^3 

one  hundred  per  cent  of  their  machines  going  one  hundred  per 
cent  oi  the  time,  when  the  hours  o£  work  were  too  long  to  avoid 
fatigue  and  to  insure  regular  attendance. 

And  so  I  think  we  have  learned  during  the  war  two  things, 
at  least.  We  have  learned  first  of  all  that  support  is  given  to 
human  demands  in  industry,  through  convincing  demonstration 
of  their  effects  upon  production;  and  secondly,  we  have  learned 
that  a  whole  field  of  knowledge  remains  to  be  discovered  on  the 
subject  of  working  conditions  and  industrial  relations,  and  that 
discoveries  are  to  be  made  through  a  scientific  attitude  and  a 
desire  to  find  out  the  facts.  In  a  few  instances  this  attitude  has 
been  due  very  largely  to  the  introduction  of  women,  because 
with  the  new  personnel  which  women  represented,  there  was  a 
reason  for  making  a  study  of  working  conditions  which  was 
lacking  when  the  plants  were  continuing  to  employ  men  just  as 
they  had  always  employed  them. 

During  the  war  another  change  took  place  which  affects  wo- 
nien.  Women's  opportunities  to  work  were  enlarged.  But,  more 
important  than  this  enlargement, — because  it  is  true  that  wo- 
men were  in  a  variety  of  occupations  before  the  war, — more 
significant  even  than  a  new  opportunity  was  the  new  attitude  of 
the  public  towards  it, — the  public's  interest  in  seeing  women 
enter  new  fields  of  work. 

If  we  have  in  industry  a  group  which  is  limited  in  its  choice 
of  occupation,  a  group  which  is  expected  by  custom  or  prejudice 
to  confine  itself  to  certain  occupational  fields  and  not  go  beyond 
them,  this  group  will  of  necessity  exert  a  down-drag  on  stand- 
ards. It  is  not  only  a  question  of  giving  enlarged  opportunities 
to  women,  but  it  is  a  question  of  developing  throughout  indus- 
try a  recognition  of  the  right  of  the  individual  to  choose  the  job 
for  which  that  individual  is  best  equipped,  and  in  which  he  or 
she  will,  therefore,  most  effectively  contribute  to  the  life  and 
the  weahh  of  the  nation.  If  we  carry  out  that  principle  fully 
and  logically,  we  shall  not  have  barriers  of  custom  or  prejudice 
against  the  employment  of  women. 

This  freedom  of  choice  is  vital  not  only  to  standards  in  in- 
dustry but,  also,  to  standards  of  living  in  the  home.  Strange  as 
it  may  seem  we  always  have  to  go  over  the  ground  and  prove 
that  women  are  working  for  the  same  reason  that  people  have 
worked  for  many,  many  centuries  on  this  globe,  that  is,  to  earn 
a  living.  Women  have  worked  in  the  past,  as  men  also  worked, 
under  a  different  order  and  a  different  organization  of  industry, 


4J4  SELECTED    ARTICLES 

and  perhaps  the  new  organization  of  industry  under  tlic  factory 
system  affected  more  broadly  and  immediately  the  status  ol 
men  in  the  industrial  world,  whereas  for  women  some  tasks  re- 
mained in  the  home  and  were  performed  by  women  without 
wages.  The  number  of  these  tasks  at  home  has  gradually  de- 
creased. 

Perhaps  because  of  the  slowness  of  that  process,  we  do  not 
realize  that  the  process  is  essentially  the  same  for  women  as  lor 
men.  There  was  a  time  when  men  went  into  modern  industry. 
They  went  in  at  the  beginning  and  women  have  been  going  in 
more  gradualli'.  So  we  miss  the  real  truth  of  the  matter  by 
failure  to  view  the  fundamental  causes  of  this  so-called  intro- 
duction of  women  into  industry.  The  important  fact  is  simply, 
as  has  been  said  many  times,  that  the  conditions  under  which 
women  work  have  changed,  and  much  of  their  work  is  no  longer 
done  at  home.  Many  of  the  tasks  of  women  are  now  done  under 
a  more  highly  organized  system.  The  dillerenccs  in  indus- 
trial development  are  great,  however,  in  different  parts  of  the 
country,  and  these  differences  arc  reflected  in  public  sentiment 
about  women's  work.  Those  who  live  in  a  community  w'.ierc 
the  employment  of  women  for  wages  has  not  \ct  become  ex- 
tensive are  likely  to  judge  the  whole  question  as  it  affects  the 
nation  from  the  standpoint  of  conditions  in  their  own  locality. 
It  is  in  a  highly  developed  industrial  community,  lunvcvir,  tliat 
we  can  best  study  the  problem. 

Women  are  w^orking  for  the  very  same  reason  that  tlicy 
have  worked  for  many  centuries,  and  that  is  to  contribute,  first, 
to  their  own  support,  and,  second,  to  the  support  of  the  family 
group  of  which  they  are  a  part.  We  have  a  certain  typical  fam- 
ily in  mind  which  we  consider  the  typical  family  in  American 
life.  It  is  composed  of  the  father,  the  mother  and  the  children, 
who  are  in  school,  and  we  are  very  likely  to  interpret  questions 
of  women's  work  in  the  light  of  that  famil\-  and  its  needs. 
There  arc  however,  many  families  of  a  different  composition, 
which  are  also  typical  in  American  life,  and  in  the  national 
standard  of  living  all  the  different  types  have  their  influence. 

One  of  these  other  types  is  the  family  in  which  the  history 
is  farther  advanced  than  in  the  typical  family  usually  chosen 
as  the  "norm."  In  this  older  family  the  children  are  grown, 
and  the  father  or  mother  may  be  dead  or  unable  to  work  or  to 
contribute  to  the  family  support.  In  these  families  it  is  very 
likely  to  be  the  daughters  who  are  the  mainstay.     It  is  upon  the 


PROBLEAIS    OF   LABOR  4^5 

work  of  women  in  industry  tliat  tliey  depend  ver^  largely  for 
their  support.  And  the  welfare  of  the  younger  children  ui  these 
families  depends  verj^  largely  upon  tlie  standard  of  wages  earned 
by  tlieir  older  sisters.  Facts  hke  these  have  been  brought  out 
in  many  official  investigations. 

The  large  investigations  made  by  Act  of  Congress  in  1907-08 
revealed  the  fact  that  such  was  the  typical  family  of  women  in 
industry.  Whether  it  be  in  the  mills  of  the  north,  or  the  mills 
of  the  south,  or  in  an  urban  industry  like  clothing,  or  an  indus- 
try which,  like  the  making  of  glass,  is  more  largely  carried  on 
in  country  districts,  in  all  these  varied  communities  when  the 
families  of  the  girls  emplo3-ed  in  these  important  and  character- 
istic trades  were  visited,  it  was  found  that  the  proportion  of  the 
family  income  contributed  by  the  daughters  was  larger  in  the 
majority  of  cases  than  the  proportion  contributed  by  the  sons, 
v.hile  in  no  group  did  the  proportion  contributed  by  the  father 
average  higher  than  fifty-six  per  cent  of  the  total  family  budget. 

Now  those  are  the  facts.  Whatever  v/e  may  believe  to  be 
our  ideal  of  American  life,  however  convincingly  we  may  be 
told  that  if  the  home  is  to  be  preserved,  women  must  not  go  into 
industry,  the  facts  are  that  thousands  of  homes  are  dependent 
very  largely  upon  the  earnings  of  women  and  that  our  decision 
as  to  the  wages  which  are  to  be  paid  to  women  will  determine 
in  very  large  measure  the  standard  of  living  for  those  thou- 
sands of  families  throughout  the  country. 

That  being  the  case,  it  seems  to  be  clear  in  the  experience 
of  the  war  that  the  statement  made  officially  for  the  first  time 
I)}-  the  federal  government  that  there  should  be  equal  pa^^  for 
equal  work  is  a  long  step  forward,  but  it  does  not  go  the  whole 
wai'  because  it  is  commonl}'  held  to  apply  only  to  those  occupa- 
tions in  which  women  take  the  place  of  men,  and  then  to  those 
occupations  only  if  they  are  performed  in  identically  the  same 
way  when  women  are  engaged  in  them  as  they  are  performed 
when  men  are  engaged  in  them.  The  statement  of  the  principle 
of  equal  pay  for  equal  work  brings  up  the  whole  question  of 
the  basis  of  determination  of  women's  wages.  The  m.ore  fun- 
damental principle  that  has  been  enunciated  again  and  again  dur- 
ing the  war  and  before  the  war,  is  that  the  minimum  basis  of 
wages  should  be  the  standard  of  subsistence  for  the  typical 
American  family.  If  we  accept  this  principle  and  if  we  recog- 
nize the  fact  that  the  families  of  women  wage-earners  are  de- 
pendent  in   large   measure   upon   the   earnings   of   wom.en.    then 


4Ai  SLLECTliD   ARTICLES 

there  seems  to  be  no  logical  reason  for  saying  that  the  earnings 
ui  uonien  should  be  on  any  other  basis  than  tlie  earnings  ol 
men.  That  is  to  say,  tliat  the  minimum  wage  should  cover  the 
cost  of  living,  not  merely  for  the  individual  but  for  possible 
dependents  of  the  individual.  Over  and  above  that,  we  neces- 
sarily develop  differentials  in  wage  rates  corresponding  to  dif- 
ferences in  skill,  differences  in  length  of  service  and  all  tla- 
other  factors  that  normally  make  for  difference  in  wages. 

Bui  whatever  the  accepted  basis  may  be,  it  is  impossible  in 
the  light  of  the  experience  during  the  war  to  defend,  as  socially 
desirable,  a  difference  in  the  method  of  determination  of  the 
wages  of  women  and  the  wages  of  men,  based  on  the  assumption 
that  some  occupations  are  men's  work,  rated  according  to  men's 
wages,  and  other  occupations  are  women's  work  with  women's 
earnings  as  their  reward.  Our  new  conception  should  be  that  it 
is  the  individual  and  not  the  sex,  that  determines  both  the  oc- 
cupation and  the  wage. 

Now  in  all  these  problems,  in  the  question  of  wage  rates, 
the  question  of  hours  of  work,  and  especially  in  such  a  problem 
as  that  of  unemployment,  men  and  women  workers  have  a  com- 
mon interest.  Indeed,  all  of  the  fundamental  labor  problems 
effect  both  men  and  women.  But  there  are  also  special  prob- 
lems in  the  present  status  of  women  workers. 

A  very  serious  question  which  came  up  during  the  war  is 
still  with  us.  It  was  the  problem  of  a  plant  or  a  company  in 
which  there  had  been  a  long  histor>-  of  bitter  relations  between 
employers  and  workers.  The  moment  a  company  of  that  kind 
which  had  not  secured  the  asset  of  good  will  in  human  relations, 
whatever  else  it  may  hnve  had  to  its  credit,  announced  its  plans 
to  introduce  women,  no  matter  how  necessarj-  it  might  seem  to 
be  from  the  point  of  view  of  labor  conditions  in  the  communitj% 
or  the  need  of  the  country  for  the  particular  product,  at  once, 
that  company  was  open  to  the  suspicion  of  using  the  war  as  n 
pretext  for  introducing  women  and  hence  lowering  standards. 
This  is  a  suspicion  which  we  may  still  have  ahead  of  us,  though 
the  war  is  over.  Emplojers  may  in  the  future  be  under  the 
suspicion  of  u.^ing  women  as  a  means  of  changing  the  balance 
of  power  between  themselves  and  their  w^orkers,  or  of  employ- 
ing women  as  a  means  of  settling  industrial  disputes  to  the  ad- 
vantage of  the  company.  On  the  other  hand,  obstacles  may  be 
put  into  the  way  of  the  attainment  of  standards  for  women  in 
industry',   if   their   fellow-workers,   the   men,    fearing   a   lowered 


PROBLEMS    OF   LABOR  4^7 

standard  or  unemployment,  oppose  blindly  the   employment  of 
women. 

It  seems  clear  that  both  of  these  dangers,— exploitation  by 
employers  and  the  opposition  of  working  men  to  wider  oppor- 
tunities for  women.—must  be  met  by  such  good  will  and  good 
faith  in  industry  as  shall  establish  clearly  for  women  the  stand- 
ard which  should  be  established  for  all  workers.  No  other  way 
out  can  be  found  except  recognition  by  industry  itself  of  the 
need  for  dealing  with  this  question  as  vital  alike  to  the  standards 
of  industry  and  the  standards  of  the  home. 

We  would  all  agree  that  the  employment  of  women  in  in- 
dustry has  a  vital  effect  upon  the  home,  upon  children,  and  upon 
family  Ufe,  and  many  view  with  misgivings  the  tendency  to 
enlarge  the  boundaries  of  women's  work  for  wages.  But  an- 
other point  of  view  is  reasonable.  If  we  are  entrusting  to  the 
women  of  the  country  such  vital  things  as  the  care  of  the  home 
and  the  care  of  the  children  and  a  very  large  share  of  responsi- 
bility for  the  development  of  family  life,  we  cannot  expect  them 
to  achieve  success  in  these  tasks  if  we  continue  to  deny  to  wo- 
men the  development  of  their  best  capacity  and  of  their  best 
power.  Far  from  being  a  movement  antagonistic  to  the  best 
interests  of  the  home,  the  best  interests  of  the  family  and  the 
best  interests  of  children,  it  is  precisely  on  the  ground  of  these 
best  interests  that  we  may  view  with  satisfaction  the  enlarging 
area  of  occupations  for  women  and  the  new  tendency  to  value 
their  work  on  a  different  basis,  whether  it  be  work  for  wages 
or  whether  it  be  unpaid  work  in  the  home. 

It  is  the  woman  who  is  actually  paid  a  just  wage  for  her  job 
who  can  give  a  demonstration  of  effectiveness  and  capacity  and 
power,  and  her  experience  will  lead  us  to  a  clearer  realization 
of  the  economic  contribution  which  women  are  making  in  the 
home  without  wages.  And  the  job  itself,  appraised  at  its  true 
value,  releases  new  power  in  the  individual  who  achieves  it.  On 
these  grounds,  it  is  by  no  means  a  small  argument  that  we  have 
for  the  development  not  merely  of  a  protective  attitude  toward 
women  in  industry,  but  of  a  real  recognition  of  women  as  an 
essential  part  of  our  whole  industrial  organization,  and  as  in- 
volved everj'where  in  precisely  the  same  fundamental  problems 
as  confront  men  of  industry. 

Although  these  problems  seem  to  be  overwhelming  in  their 
complexity,  there  are  certain  signs  of  a  new  spirit  in  industry 
which  are  very  encouraging  at  this  moment.     If  industry  should 


4js  selected  articles 

be  in  clanger  of  not  measuring  up  to  the  new  challenge, — the 
challenge  to  prove  that  the  ideal  we  have  had  in  political  life 
can  be  expressed  iii  industry, — then  the  problems  ahead  will  be 
serious,  but  there  are  signs  of  realization  on  the  part  of  man- 
agement in  industry  of  the  importance  of  devising  new  methods 
of  expressing  human  relations.  For  example,  the  establishment 
of  the  personnel  department  on  a  more  dignified  basis  is  a  recog- 
nition that  the  working  force  is  at  least  equal  in  importance  with 
the  whole  organization  of  production  or  finance.  That  recog- 
nition should  go  far  deeper.  It  is  sometimes  a  mere  groping 
desire  on  the  part  of  management  to  adjust  methods  to  new 
conditions. 

The  newest  and  most  significant  of  these  developments  are 
the  experiments  in  new  plans  of  cooperative  relations  with  em- 
ployees. These  are  taking  the  form  of  shop  committees,  which 
aim  to  represent  the  collective  action  of  workers  and  employers. 
In  some  instances,  those  very  experiments  will  give  rise  to  the 
new  industrial  disputes,  and  new  difliculties,  especially  if  they  be 
developed  in  plants,  v/hich  as  in  the  case  of  the  introduction  of 
women  already  cited,  have  had  a  long  history  of  bitter  relations 
between  employers  and  workers.  Moreover,  the  important  ques- 
tion is,  whether  these  organizations  of  workers  which  are  limited 
to  one  establishment,  with  the  workers  dealing  with  the  em- 
ployer concerning  working  conditions  in  that  one  establishment, 
can  be  the  real  answer  to  the  demand  for  industrial  democracy, 
or  whether  the  plan  for  collective  bargaining  advocated  for 
many  years  by  the  workers  themselves, — whereby  the  workers  in 
all  shops  within  a  trade  are  joined  together  in  an  organization 
which  in  turn  bargains  with  the  employers  in  that  trade,-  has 
in  it  the  elements  of  growth. 

That  is  a  question  which  we  are  going  to  be  able  to  answer 
through  these  various  experiments  and  that  is  the  real  value  of 
these  experiments.  Their  success  will  depend  on  good  faith  and 
.!,Hjod  will.  The  ultimate  test  of  their  enduring  value  will  be 
whether  or  not  they  will  cut  below  special  interests  and  empha- 
size the  common  interests  and  the  common  good.  Just  to  the 
extent  that  they  do  not  seive  the  common  good  and  make  the 
industry  a  common  possession,  they  will  necessarily   fail. 

Their  purpose  is  to  express  the  new  spirit  which  has  been 
released  in  all  nations  by  the  world  conflict.  This  spirit  may  be 
described  as  a  new  appreciation  of  the  position  of  the  individual 
in   society,  and  a  protest  against  those  practices  in   democracies. 


PROBLEMS    OF   LABOR  4-^9 

as  well  a^  111  autocracies,  which  gave  a  wholly  selfish  political 
influence  to  an  economic  power  gained  through  failure  to  recog- 
nize the  interests  of  the  workers  or  of  the  community  in  the  con- 
duct of  industry. 

Another  highly  important  sign  of  the  times  is  the  inclusion 
of  labor  standards  in  the  Treaty  of  Peace,  which  signifies  ac- 
ceptance of  the  principle  that  the  new  peace  must  be  shaped  on 
the  fundamental  basis  of  international  labor  standards.  The 
genuine  application  of  this  principle  would  rebuild  the  world  on 
a  new  foundation. 

The  demand  on  industry  today  is  that  it  should  be  able  to 
meet  these  newly  expressed  social  needs.  It  is  true  that  we  can 
decrease  hours  to  an  extent  probably  that  we  have  dreamed  of 
in  the  past  while  at  the  same  time  increasing  production.  But 
increased  production  under  existing  conditions  is  not  the  only 
test  of  practicability  to  be  considered.  The  demand  to  be  made 
upon  industry  is  that  it  will  so  change  its  methods,  and  so  de- 
velop efficiency,  as  to  be  able  to  meet  these  new  demands,  whicli 
are  based  primarily  upon  social  needs.  For  example,  consider 
two  plants.  One  of  them  discovers  that  the  eight  hour  day  can 
be  granted  and  production  increased,  while  the  other  one  dis- 
covers that  to  shorten  hours  on  the  basis  of  its  present  methods 
will  decrease  production.  We  ask  of  industry  that  the  plants 
which  the  second  in  the  illustration  represents, — those  which 
have  not  developed  efficiency  in  management  to  enable  them  to 
insure  the  minimum  conditions  deemed  necessary  for  the  work- 
ers and  citizens  in  a  democracy, — shall  measure  up  to  a  changed 
method  of  management  which  shall  enable  business  to  insure 
the  standard  of  life  set  up  as  our  goal. 

Increased  production  and  increased  efficiency  are  obviously 
essential  if  the  standard  of  living  is  to  be  raised.  This  is  not 
only  a  question  of  fairer  distribution.  It  is  a  question  of  en- 
larged production  through  greater  efficiency  all  over  the  world, 
including  this  country  of  ours.  But  the  point  is  that  efficiency 
■nd  enlarged  production  cannot  be  achieved  except  under  guar- 
antees that  the  results  of  increased  efficiency  and  the  results  of 
increased  production  shall  be  a  common  possession.  So  long 
as  we  have  in  industry  the  conditions  which  give  ground  for 
belief  that  these  guarantees  do  not  exist,  the  co-operation  of 
the  workers  in  increasing  production  will  be  withheld,  because 
tlieir  experience  has  shown  in  too  many  instances  that  increased 
production   resulted  in   cuts  in   wage   rates  and  that   for   some 


430  SELECTED   ARTICLES 

i«a80u  tiie  beneficial  results  did  not  cume  either  to  them  or  to 
the  community.  Industry  must  do  away  with  the  causes  of  this 
distrust  if  the  vital  national  need  of  increased  production  is  to 
be  met,  and  the  wealth  produced  which  alone  will  make  possible 
an  adequate  standard  of  living. 

We  cannot  attain  increased  elhciency  and  increased  produc- 
tion if  we  leave  women  workers  out  of  the  question.  They  rep- 
resent at  least  twenty  per  cent  of  the  gainfully  employed  popu- 
lation of  the  country.  In  some  industries  and  communities  the 
proportion  is  much  higher.  For  them,  as  for  all  workers,  there 
must  be  assured  a  share  in  the  directing  power  of  industry 
through  industry  itself  and  through  the  state,  to  the  end  that 
their  special  needs  will  not  be  neglected  but  will  be  merged  into 
tlie  whole  common  interest  for  which  men  and  women  must  be 
held  jointly  responsible. 


STANDARDS   GOVERN li\G    THi': 

EMPLOYMENT  OF  WOMEN 

IN  INDUSTRY' 

In  peace  or  in  war,  women's  work  is  essential  to  the  nation. 
During  the  war  the  experience  of  all  countries  has  shown  that 
women  were  ready  and  able  to  take  the  places  of  men  with- 
drawn for  military  service.  So  important  did  their  work  become 
that  in  Great  Britam  it  was  actually  the  War  Department  wliich 
declared  that  "efforts  must  be  devoted  to  amplify  and  extend  the 
scope  of  usefulness  by  which  alone  our  country  can  hope  to 
emerge  victorious  from  a  struggle  without  parallel  in  licr  long 
and  glorious  history." 

The  experience  to  which  the  war  has  drawn  public  attention 
was  true  before  the  war  and  will  be  equally  true  when  peace  is 
restored.  Before  the  war  the  number  of  women  gainfully  em- 
ployed increased  In  the  decade  before  igio  from  five  to  eight 
million,  of  whom  two  million,  five  hundred  thousand,  were  in 
manufacturing,  trade,  transportation  or  public  service.  Since 
then  the  indications  are  that  in  numbers  and  proportions,  women 
have  become  increasingly  important  in  industry. 

The  greater  necessity  for  control  of  the  standards  of  wo- 
mrn's  employment  is  due  to  the  fact  that  women  have  been  in 
a  weaker  position  economically  than  mm.     Reconstruction   v.ill 

'  Set  by   the  U.   S.   Department  of  Labor  in    1918. 


PROBLEMS   OF   LABOR  43i 

give  an  opportunity  for  a  new  up-building  of  safeguards  to 
conserve  alike  the  industrial  efficiency  and  the  health  of  wo- 
men, and  to  make  it  impossible  for  selfish  interests  to  exploit 
them  as  unwilling  competitors  in  lowering  standards  of  wages, 
hours,  working  conditions  and  industrial  relations  which  are  for 
the  best  interests  of  the  workers,  the  industries  and  the  citizen- 
ship of  the  country. 

During  the  war,  by  vote  of  the  War  Labor  Policies  Board 
all  contracts  of  the  federal  departments  have  contained  a  clause 
requiring  full  compliance  with  state  labor  laws,  and  in  each 
state  an  official  of  the  state  labor  department  has  been  deputized 
by  the  head  of  the  contracting  departments  of  the  federal  gov- 
ernment to  co-operate  with  federal  agencies  in  enforcing  these 
provisions  of  the  contract.  This  affords  a  basis  and  a  precedent 
for  continued  relations  between  state  and  federal  agencies  in 
the  up-building  of  standards  for  women's  labor.  As  the  num- 
ber of  contracts  grows  fewer  with  the  coming  of  peace,  the  re- 
sponsibility of  the  states  increases.  But  the  recognition  of  the 
national  and  international  importance  of  standards  of  labor 
conditions  will  still  be  paramount  since  in  peace,  no  less  than 
in  war,  the  nation  will  depend  for  its  prosperity  upon  the  pro- 
ductive efficiency  of  its  workers.  No  other  foundation  for  com- 
mercial success  will  be  so  sure  as  the  conservation  of  those 
practices  in  industry  which  make  for  the  free  and  effective  co- 
operation of  the  workers.  Protection  of  the  health  of  women 
workers  is  vital  as  an  economic  as  well  as  a  social  measure  of 
reconstruction. 

Therefore  at  this  time  in  recognition  of  the  national  im- 
portance of  women's  work  and  its  conditions,  the  federal  gov- 
ernment calls  upon  the  industries  of  the  country  to  co-operate 
with  state  and  federal  agencies  in  maintaining  the  standards 
herein  set  forth  as  a  vital  part  of  the  reconstruction  program 
of  the  nation.  These  standards  have  been  adopted  by  the  War 
T,ahor  Policies  Board. 

Sfaiidards  Recommended  for  the  Employment  of  JVoinen  ' 

I.    Hours  of  Labor 

I.  Daily  Hours.  No  Woman  Shall  Be  Employed  Or  Permitted 
To  Work  More  Than  Eight  Hours  In  Any  One  Day  Or  Forty- 
Eight  hours  In  Any  One   Week.     The   Time  When   The  Work 

'  In  the  following  outline  the  word  "shall"  and  the  larger  type  in 
(Urate   these   provisions   which   are   of   the   most   vital    importance. 


4J2  SELECTED   ARTICLES 

Of  li'otnen  Employees  Shall  Begin  And  End  And  The  Time 
Allowed  For  Meals  Shall  Be  Posted  In  A  Conspicuous  Place  In 
Each  Work  Room  And  A  Record  Shall  Be  kept  Of  The  Over- 
Time  Of  Each  Woman  Worker. 

2.  Half  Holiday  On  Saturday.  Observance  of  the  half-holi- 
day should  be  the  custom. 

3.  One  Day  Of  Rest  In  Seven.  Every  Woman  ll'orker 
.Shall  Have  One  Day  Of  Rest  In  Every  .Seven  Day.w 

4.  Time  For  Meals.  At  Eeasi  Three-Qnarters  Of  An  Hour 
Shall  Be  Allowed  for  a  Meal. 

5.  Rest  Periods.  A  rest  period  of  ten  minutes  should  he  al- 
lowed in  the  middle  of  each  working  period  without  thereby  in- 
creasing the  length  of  the  working  day. 

6.  Night  Work.  No  Women  Shall  Be  Employed  Between  The 
Hours  Of  Ten  P.  M.  And  Six  A.  M. 

n.    Wages 

1.  Equality  With  Men's  Wages.  Want  en  Doing  The  Same 
Work  As  Men  Shall  Receive  The  Same  Wages  With  Such  Pro- 
portionate Increases  As  The  Men  Are  Receiving  In  The  Same 
Industry.  Slight  changes  made  in  the  process  or  in  the  arrange- 
ment of  work  should  not  be  regarded  as  justifying  a  lower 
wage  for  a  woman  than  for  a  man  unless  statistics  of  produc- 
tion show  that  the  output  for  the  job  in  question  is  less  when 
women  are  employed  than  when  men  are  employed.  If  a  dif- 
ference in  output  is  demonstrated  the  difference  in  the  wage 
rate  should  be  based  upon  the  difference  in  production  for  the 
job  as  a  whole  and  not  determined  arbitrarily. 

2.  The  Basis  Of  Determination  Of  Wages.  Wages  Should  Be 
Established  On  The  Basis  Of  Occupation  And  Not  On  The 
Basis  Of  .Se.r.  The  Minimum  Wage  Rate  Should  Cover  The 
Cost  Of  Living  For  Dependents  And  Not  Merely  For  The  In- 
dividual. 

III.    Working  CoNmTioNS 

I.  Comfort  And  .Sanitation.  State  labor  laws  and  industrial 
codes  should  be  consulted  with  reference  to  provisions  for  com- 
fort and  sanitation.  Washing  facilities,  with  hot  and  cold  water, 
soap  and  individual  towels,  should  be  provided  in  sufficient 
number  and  in  accessible  locations  to  make  washing  before  meals 
and  at  the  close  of  the  work  day  convenient. 

Toilets  should  be  separate  for  men  and  women,  clean  and  ac- 
cessible.    Their   numbers   should   have   a    standard    ratio   to   the 


PROBLEMS    OF   LABOR  433 

number  of  workers  employed.  Workroom  floors  should  be  kept 
clean.  Dressing  rooms  should  be  provided  adjacent  to  washing 
facilities,  making  possible  change  of  clothing  outside  the  work- 
rooms. Rest  rooms  should  be  provided.  Lighting  should  be  ar- 
ranged that  direct  rays  do  not  shine  into  the  workers'  eyes. 
Ventilation  should  be  adequate  and  heat  sufificient.  Drinking 
water  should  be  cool  and  accessible  with  individual  drinking 
cups  or  bubble  fountain  provided.  Provision  should  be  made 
for  the  workers  to  secure  a  hot  and  nourishing  meal  eaten  out- 
side the  workroom,  and  if  no  lunch  rooms  are  accessible  near 
the  plant,  a  lunch  room  should  be  maintained  in  the  establish- 
ment. 

2.  Posture  At  Work.  Continuous  standing  and  continuous 
sitting  are  both  injurious.  A  seat  should  be  provided  for  every 
woman  employed  and  its  use  encouraged.  It  is  possible  and 
desirable  to  adjust  the  height  of  the  chairs  in  relation  to  the 
height  of  machines  or  work  tables,  so  that  the  worker  may 
with  equal  convenience  and  efficiency  stand  or  sit  at  her  work. 
The  seats  should  have  backs.  If  the  chair  is  high,  a  foot  rest 
should  be  provided. 

3.  Safety.  Risks  from  machinery,  danger  from  fire  and  ex- 
posure to  dust,  fumes  or  other  occupational  hazards  should  be 
scrupulously  guarded  against  by  observance  of  standards  in 
State  and  Federal  codes.  First  aid  equipment  should  be  pro- 
vided. Fire  drills  and  other  forms  of  education  of  the  workers 
in  the  observance  of  safety  regulations  should  be  instituted. 

4.  Conditions  Needing  Correction.  Work  can  be  more 
efficiently  done  by  either  men  or  v\romen  if  healthful  conditions 
are  established.  It  is  usually  possible  to  change  conditions  so  as 
to  remove  such  hazards  to  health  as  the  following: 

A.  Constant  standing  or  other  postures  causing  pliysiral 
strain. 

B.  Repeated  lifting  of  heavy  weights  or  other  abnormally 
fatiguing  motions. 

C.  Operation  of  mechanical  devices  requiring  undue 
strength. 

D.  Exposure  to  excessive  heat  or  excessive  cold. 

E.  Exposure  to  dust,  fumes,  or  other  occupational  poisons 
without  adequate  safeguards  against  disease. 

5.  Prohibited  Occupations.  Women  Must  Not  Be  Employed 
In  Occupations  Involving  The  Use  Of  Poisons  Which  Are 
Proved  To  Be  More  Injurious  To  Women  Than  To  Men,  Such 


434  SELl-XTEL)    AR'riCLKS 

As    Certain    Processes    In    The    Lead    Industries.      Subsequent 
rulings  on  the  dangerous  trades  will  be  issued. 

6.  Uniforms.  Uniforms  with  caps  and  comfortable  shoes 
are  desirable  for  health  and  safety  in  occupations  for  which 
machines  are  used  or  in  which  the  processes  are  dusty. 

IV.     Home  Work 

1.  No  Work  Shall  Be  Given  Out  To  Be  Done  In  Rooms 
Used  For  Living  Or  Sleeping  Purposes  Or  In  Rooms  Directly 
Connected  With  Living  Or  Sleeping  Rooms  In  Any  Divelling 
Or  Tenement. 

V.    Employment  Management 

1.  Hiring,  Separations  And  Determination  Of  Conditions. 
In  establishing  satisfactory  relations  between  a  company  and  its 
employees,  a  personnel  department  is  important  charged  with 
responsibility  for  selection,  assignment,  transfer  or  withdrawal 
of  workers  and  the  establishment  of  proper  working  conditions, 

2.  Women  In  Supervisory  Positions.  Where  women  are 
employed,  a  competent  woman  should  be  appointed  as  employ- 
ment executive  with  responsibility  for  conditions  aflFecting 
women.  Women  should  also  be  appointed  in  supervisory  posi- 
tions in  the  departments   employing  women. 

3.  Choice  Of  Occupations.  The  opportunity  to  choose  an 
occupation  for  which  one  is  best  adapted  is  important  in  safe- 
guarding health  and  in  insuring  success  in  the  work  to  be  done. 

VI.       COOPERATIOX    OF    WoKKERS     I X     I-",NI-nRrEMENT 

OF  Standards 

I.  The  Responsibility  Should  Not  Rest  Upon  The  Manage- 
ment Alone  To  Determine  Wisely  And  Effectively  The  Condi- 
tions Which  Should  Be  Established.  The  Genuine  Cooperation 
F.ssential  To  Production  Can  Be  Secured  Only  If  Definite  Chan- 
nels Of  Communication  Betzveen  Employers  And  Groups  Of 
Their  Workers  Are  Established.  The  Need  Of  Creating  Meth- 
ods Of  Joint  Negotiation  Betzveen  Employers  And  Groups  Of 
Employees  Is  Especially  Great  In  The  Light  Of  The  Critical 
Points  Of  Controversy  Which  May  Arise  In  A  Time  Like  The 
Present.  Existing  Channels  Should  Be  Preserved  And  Nezv 
Ones  Opened  If  Required,  To  Provide  Ea.ner  Access  For  Dis- 
cussion Between  Employer  and  Employees. 


INDEX 


Absenteeism,    413-14 

Adams,    Brooks,    5 

Adjustment    of    differences,    362 

American   Federation   of  Labor,   27, 

28,    186,   236,   237,   286,   289,    347, 

350- 1 
American  labor  movement,   32 
Anthrax,    380,    396 
Anti-strike    legislation,    32 
Apprenticeship   rules   of  unions,   200 
Arbitration,    Compulsory,    396 
Associations       of      employers.       See 

Employers'    associations 
Association,     Right    of,    356 
Australian    system    of    dealing    with 

labor  disputes,   272-8 

Bargaining,  78;  See  also  Collec- 
tive   bargaining 

Beeby,    George,    272 

Bell,   George   L.,   306 

Bloomfield,  Meyer,  Introduction, 
1-3     .  . 

Brandeis,   Louis  D.,   262 

Bonus   systems,   87,   89-96 

British    Labor    Party,    370 

Capital.    76 

Capitalism     and     social     discontent, 

203-12 
Causes    of    friction    and    unrest,    35 
Causes   of   strikes,   269-72 
Child   labor.    351.    379-80.    384.    392-S 
Closed    shop,     lovS,    238-40,     243-55 
Cole,   G.   D.   H.,'  158 
Collective   bargaiiiing,   6,   34,   212-36, 

230,     297,     35T,     352,     360,       42S; 

Ethics   of   215-20;    In   glass   bottle 

industry,   220,    272 
Commission     on     Industrial     unrest. 

(British"),    37" 
Common    people's    union.    255-61 
Commons,    John    R.,    396 
Compulsory    arbitration,    306 
Conciliation,    366 
Conciliation    boards,    21 
Contract,    Freedom    of,    356 
Cost    of    living,    33.     36,    51-75.    90 

102,    302,    401;    Measurement    of. 

56-68 
Cost    of    production,    79-82 
Council   of  National   Defense,   303 
Courts,    Attitude    of,    290-300 
Credit,    Control    of,     29 
Creed,    A    new    industrial,    373-4 

Demands    of    labor,    42-50 
Dennison,  Henry  S.,   120,   352 
Dismissal    wage,    171 
Distribution  of  earnings,   18-19 


Eight-hour    day,     139-43,    272 
Eliot,    Charles   W.,    123 
Emerson  bonus  plan,  93-4,  95 
Employee  representation,   351,   370-2 
Employment     agencies,     378 
Employment,  Continuity  of,  413-14; 

Security    of,    403-4 
Employers'    associations,    20,    409-10 
Employer's       viewpoint       of      trade 

unionism,    187-203 

Family   budgets,    61,  62,    63,   64,    65, 

66 

Feiss,    Richard    A.,  150 
Fisher,    Irving,    376 

Fitch.    John    A.,    97,  153 
French   Revolution,  69 

Frey,   John    P.,    42,  286 

Gantt    task     and    bonus    system,    91 
Carton    foundation,    7 
Gary,    Elbert    H.,    236 
Gompers,    Samuel,   27,    301 
Government  employes,  366 
Grievances   of  workers,    11- 12 
Groat,    George    G.,    290 
Group    insurance,    324-31 

Halsey    Premium    plan,   89 

Health    insurance,    175,    314-24,    337 

Hoagland,    H.    E.,    245 

Hobson,    J.    A.,    215 

Hours  of  work,    36,   38,   41,   42,    139- 

67.    356.    378,    382-7,    431-2 
Housing    339-45 
Howard,    Earl    D.,    278 
Hoxie,    Robert   F.,   87 

Thlder.   John,    339 

Incorporation  of  trade  unions,  262- 
7 

Index   number  wage,   68-75 

Industrial  councils,  24,  25;  hous- 
ing. 346;  insurance,  313-31.  332; 
Parliament,   50;   physiology,   416 

Inji:nctions,     29 

Instincts    of    workers,    376-8 

International  labor  code,  378-96; 
labor   office,    386-8 

Joint    committees,    22 
Jurisdictional    disputes,    189 

Kimball,    H.    W.,    3^4 

Labor  as  a  commodity,  78;  New 
labor  code  of  the  world,  378-96; 
Labor  cost,  79-82;  demands  of, 
42-50;  Function  of,  16;  Place- 
ment, 339;  Proposals  at  Presi- 
dent's Conference,  349-50;  Un- 
rest,   35 


436 


INDEX 


Labor's    Bill    of    Rights,    j; 

Lapp.    John    A.,    316 

l^auyhlin,    J.    Laurence,    203 

l^acock,    Stephen,    309 

Lead    poisoning,    392 

Limitation    of    output,    8-1 1,    13,    31, 

iQi,    301-6,    398,    402 
Lockout,    Right   to,    357 

Match    manufacturing   395 

Management,   Function   of,    16 

Medical  examination  of  employees, 
313-15 

Meeker,  Royal,    175,  331 

Methods  of  compensation,  77-123; 
See  also  Index  number  wage, 
wages,    wage    methods 

Minimum   wage,    135,   272 

Ministry  of  Labor  (British)  re- 
port,   370 

Morrison,    C.    J.,    139 

National  Industrial  Tribunal,   363 
National  War  Labor   Board,   56,  57, 

62 
Newman,   Bernard  J.,   413 
Night  work,   167-9,  390-5.  432 
Non-union     shop,     243-55 

Occupational  hygiene,  413-18 

Ogburn,  W.  F.,  56 

One    big    union,    286 

Open    shop,    238-40,    243-55,    357 

Output,   83 

Overtime,   351 

Payment    by    results,    109-11 

Peace  Treaty,  Ratification  of,  30, 
31. 

Perkins,  George  W.,   in 

Piece    work,    83-6 

Post,     Louis     F.,     5 

President's  industrial  conference, 
349-59;  Second  industrial  con- 
ference,   362 

Price,    Theodore    H.,    68 

Principles,  underlying  solution  of 
labor    problems,     13-14 

Production,   7,    16,   48,    301-12,    353-4 

Profiteering,    301,    303,    305,    399 

Profit  sharing,  37,  11 1-34;  Objec- 
tions   to,    116,     120,     133-4 

Protocol,    278,    282 

Public    ownership,    6 

Public    utilities,    366 

Railroad  brotherhoods,  125;  Em- 
ployees, 735 ;  Operation,  30; 
Wage    commission,     56,     57 

Rate   cutting,    84,   85 

Reconstruction,     5,     57 

Regional  Boards  of  Inquiry  and 
Adjustment,    363-6 

Restriction  of  output.  See  Limi- 
tation   of    output 

Rights,    Labor's    Bill    of.    27 

Rochdale    system,    34 

Rockefeller,  John  D.  Jr.,  368 

Ross,    Edward    A.,    171 

Rountrcc,    B.    Scebolra,    35 

Rowan    Premium    plan,    90 


Schereschcwsky,   J.    W.,    313 

Scientific  management,  85,  192-3, 
405-6 

.Settlement  of  disputes,  356 

Shipbuilding  Labor  Adjustment 
Board,     56,     57 

.Shop  councils,   352,    370-2 

.Shorter    workday,    139-67 

.Sickness  insurance,  314-24;  Prob- 
lem   of,    413 

.Six-hour    day,     161-7 

-Smith,    Adam,    68 

.Socialism,    47,    77 

.Socialists,    218,    269 

.Social    insurance    in    United    States, 

,   331-8 

Socialization  of  natural  resources, 
6 

.Speeding   up,    306 

.Stabilizing     the     dollar,     399-400 

Standard    of    living,    33 

.Standards,    429-34 

Standardization,    312 

.Stoddard,    Lothrop,    255 

Stone,     N.     I.,     77 

Stove   making  industry,   43 

Strike,    Riffht  to,   25,   32,   357 

-Sullivan,   J.    W.,    359 

Sympathetic   strike,    188,    358 

Syndicalism,    47 

Taff    Vale    Railway   case,    264 
Taft,   W.   H.,   212 
Taussig,    Frank    W.,    51 
Taylor,  Frederick,  84 
Tenure    of    employment,     171-84 
Trade  jurisdiction,   286 
Trade    unionism,    185-267,    283 
Trade   unions,    19,   20,   25,   359 
Training   of   workers,    358 
Transportation    problems,    339 

l^nemployment,  37,   175-84,  387-9 
Unemployment    insurance,    38,     178- 

So.    379 
Union    label.    261 

Unionism.       See    Trade    unionism 
I'nited    Mine   Workers    of   America, 

33 

Van    KIccck,    Mary   A.,   419 

Wage  boards,   273 

Wage    methods,    77-123 

Wages,      36,      102-7,     284,      355;   of 

women,    432;    And   cost   of   living, 

52,  99-102;  Wages  fund,  8 

W^ar    Labor    Board,    369 

Webb,    Sidney,     135 

Week    work,   83 

Whitley  report,  25,  369;  Commit- 
tees,   218;    Councils,    37,    so 

Woll,    Matthew,     342 

Wolman,    Leo,    220 
-Women    in   industry,    351,    370,    389- 
92,   419-34 

Working   conditions,    37 

Workmen's   compensation,    333-7 

Works    committees,    23,    24 


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